Hessian Crafts Expect No Real Growth by 2026 - Hesse’s craft sector grows slightly but faces rising costs and labor shortages
Hesse’s craft sector showed slight growth in 2025, but challenges remain. By the end of the year, the region had 78,532 registered small business—an increase of just 66 from 2024. Despite this marginal rise, many firms struggled with higher costs and weaker demand, raising concerns about long-term stability.
The sector’s modest expansion came alongside persistent difficulties. Over half of the small businesses reported rising procurement costs, which they could only partly offset by increasing prices for customers. At the same time, a third of enterprises saw orders decline for the second year running, reflecting weaker market demand.
Investment willingness also fell in 2025, though employment levels stayed largely unchanged. The number of new apprenticeship contracts rose slightly to 9,935—77 more than in 2024—but remained below pre-pandemic figures. Industry leaders pointed to a shortage of applicants, rather than a lack of training places, as the main obstacle to filling positions. Looking ahead, the Hessian Handwerksvereinigung has proposed measures to support recovery. These include expanding skilled labour training, cutting red tape for small business ideas, pushing for tax incentives on small business loans, and boosting digitalisation efforts. However, without addressing the skilled worker shortage, the sector’s future could remain uncertain. For 2026, businesses anticipate a sales increase of just one percent. After accounting for inflation, real growth is expected to stay flat. Leaders argue that stronger public investment and stable financial, tax, and regulatory conditions are essential for a meaningful recovery.
The small business sector in Hesse faces ongoing structural pressures, from rising labour, energy, and material costs to weak order books. While small gains in business numbers and apprenticeships offer some encouragement, long-term success depends on tackling the skilled worker gap and improving economic conditions. Without these changes, the sector’s stability could remain fragile.
