LATEST: GERMANY General mood less positive

ECJ’s Katja Scholz in Germany tells us about the autumn survey of the contract cleaning sector.

Hot off the press, the Federal Association of Contract Cleaners (BIV) presented the results of its current autumn business survey in October, showing the overall mood in the sector along with market forecasts and sales expectations. This survey focused on the initial impact on companies of the ‘Citizen’s Income’ and the non-existent efforts of the federal government to reduce red tape.

In spring the survey was still dominated by the war in Ukraine, but discussions surrounding the four-day week and greater trust in politicians encouraged a more optimistic mood in the sector – in contrast to the previous autumn, when the economic consequences of the Russian invasion of Ukraine, the global materials and supply chain bottlenecks resulting from the pandemic and the effects of price inflation took centre stage.

And this autumn? The mood in the contract cleaning trade has darkened, compared with this spring. Barely a quarter of the companies surveyed - 24.7 per cent compared to 40.5 per cent in spring - have positive business expectations for the current year, barely half see their business situation as unchanged and a further quarter view expectations for the coming year as more mixed or even negative.

Impact of the Citizen’s Income

On the companies’ rating scale of 1 to 10 (where 1 = no concern and 10 = great concern), the resulting score of 8.8 shows quite clearly the employers’ concern that the Citizen’s Income is increasingly competing with waged employment. Many are already noticing the initial effects of the increase in Citizen’s Income announced for January 2024. Of these, 28.4 per cent state several employees have already handed in their notice or intend to, citing specifi- cally the Citizen’s Income as the reason, while individual cases of this are occurring among a further 40 per cent at present.

“The fact that the new Citizen’s Income should exacerbate workforce shortages among seven out of 10 companies in the sector with the largest number of employees in Germany should immediately set alarm bells ringing for the politicians,” says BIV master Thomas Dietrich, in response to these figures. “The balance between challenge and support as well as between social equity and incentive to work must be constantly kept in mind by the politicians – otherwise, a dangerous development threatens the labour market, the economy and the overall performance of our businesses.”

Failure to cut red tape

The aim of the present government in Germany is to cut red tape. They would like to bring about a turnaround to counteract the bureaucratic burn-out suffered by many companies and to advance the process of digitalisation. Although the government is at present working on draft legislation to this end, the burden of red tape has not yet been reduced but has in fact even increased during Covid and the Ukraine war. This is exactly how companies in the contract cleaning sector view the present situation: on a scale of 1 = no progress to 10 = great progress, the average rating stands at a very low 1.8.

Along with the generally gloomy mood, business expectations for the coming year remain very mixed. Fewer than 30 per cent have a positive view of next year, while 32.5 per cent actually have negative business expectations. It is to be hoped that the mood in the contract cleaning sector as a whole takes a turn for the better in the coming months.