VOA survey: Surface finishing industry affected by recession

A recent survey by the VOA on the economic situation in the surface finishing industry shows that the sector is being affected by the current recession. VOA members were asked about various economic factors.

The high cost of energy, the extreme shortage of skilled workers and labor, the bureaucracy: there are many factors that place a heavy burden on the surface finishing industry. In order to always have an up-to-date picture of the economic situation, the Verband für die Oberflächenveredelung von Aluminium e. V. (VOA) regularly conducts surveys among its member companies and takes the results into account in its discussions with politicians and business representatives. The current results from spring 2024, which the association compares with previous surveys, make this clear: The members' assessment of the economic development of companies is in line with the general situation and the forecasts of the leading economic institutes.

The creeping downward trend in the economy has been shaping the mood in the surface finishing industry since last autumn and is dampening the forecasts for 2024. Although there are no extremes with "very positive" or "very negative" assessments of the member companies in the evaluation of the current survey in March 2024 and measured against the "positive" and "mediocre" assessments for 2024, 53% see their economic situation as reasonably optimistic, but in October 2023 it was still 64% and in 2021 even 94%.

The current results in detail: 47%, or just under half of the participating VOA members, currently rate the development of their company as "negative". In each case, 27 percent expect a "moderate" or "positive" development. There have been shifts from "mediocre" in both a positive and negative direction - in October 2023, 53% of participating VOA members still expected "mediocre" development, while only 37% expected "negative" and 11% expected "positive". There was also a shift from the "very negative" assessment of 5% of VOA members in October 2023 to a "negative" assessment in March 2024

According to the latest survey, the capacity utilization rate of VOA member companies is 71%. Compared to the previous survey in October 2023, it decreased by 19% on average, falling for the fifth time in a row. In 2021, capacity utilization still averaged 90% during the coronavirus pandemic. Turnover development also fell compared to the previous year for 73% of companies, by 15% on average. It only remained the same for 20% and increased for 7%. In comparison: in 2021, only 11% were affected by a decline in turnover.

In terms of orders already received this year, 73% of VOA members also noticed a decline, by an average of 17% compared to the previous year. Here too, a comparison with 2021 illustrates the current negative trend. Back then, only 6% of companies reported a drop in order figures. This development comes as no surprise, as the construction industry is currently struggling with massive losses and 93% of VOA member companies are mainly active in the construction/architecture sector. The positive aspect: despite the poor situation, there were no redundancies in 2024 or 2023.

The location conditions for companies in Germany have deteriorated massively. In an international comparison, Germany is lagging behind economically and is in danger of losing touch. This is also reflected in the survey results of the surface finishing industry. Negative factors remain: High energy prices are having a "considerable" impact on 60 percent of the companies participating in the survey and are "threatening the existence" of 7 percent. At 80 percent, they are also currently the main reason for the limited production of VOA member companies, while the shortage of labor and skilled workers and the effects of the Russia-Ukraine war rank second and third at 60 percent and 40 percent respectively. Supply bottlenecks only affect 13 percent of companies.

The VOA is committed to the interests of its member companies. In particular, it is supported by its umbrella organization vbw - Vereinigung der Wirtschaft e. V., which is actively campaigning to improve the conditions for companies in Germany with its ten-point paper on the economic policy of the traffic light government. Among other things, the vbw calls for fewer burdens in terms of bureaucracy and excessive EU requirements, a reliable guarantee of affordable energy, tax relief for companies, reforms with regard to the ongoing increase in social spending and quality management for better education. With its recommendations for action, the vbw calls for a drastic reorientation of the federal government and demands that the focus be placed on the competitiveness of companies - for a strong business location Germany. (OM-4/24)