From 40% in 2014 to 50% in 2020: Luxembourg's craft companies are exporting more and more every year, a momentum that the pandemic has not stopped, according to the latest study by the Chamber of Skilled Trades and Crafts. “Small and medium-sized companies have been more active abroad, often for one-off projects,” says Elke Hartmann, head of the advice and services department, especially when it comes to building renovation. The crisis is also pushing customers to use “regional suppliers, service providers and producers,” she says, speaking of a trend towards local products that will continue.
1,073 companies--out of a total of 8,031 craft businesses--responded to the survey for the year 2020, compared to 5,305 two years earlier. The respondents to the latest survey employ a total of 31,500 people and have a turnover of more than €5bn.
49.07% say that the crisis has had no effect on their business abroad, and 4.67% report a positive effect. The remaining 46.26% report a negative effect. Although more companies are exporting, foreign activity has remained constant for 57% of them. It has increased for 18% of the companies surveyed, and decreased for 26% of them.
On average, craft businesses generate 15% of their turnover abroad, a share that has fallen by 3%. The Chamber of Skilled Trades and Crafts refers to this as an insignificant drop. “Smaller companies often do not have a long-term export strategy but adapt to their customers. The first step across the border is often taken because of a specific customer request.”
Communication and the Greater Region
The communication sector is the one that works the most abroad, with 71%. This is followed by mechanical engineering (57%), construction (52%), food (35%) and fashion and beauty (27%). The largest companies still export the most, even if the difference is slight: 56% for those with 50 to 249 employees, compared to 44% for those with 0 employees.
The greater region also remains the preferred territory: 37% of foreign activity is in Belgium, 30% in France, 25% in Germany and 8% in other areas, such as the Netherlands (2%), Portugal (1%), Switzerland (1%), the United States (1%) and Asia (1%).
40% of Luxembourg companies explain their success abroad by existing commercial relations, and 29% by quality.
Why do some companies not export? 67% of the 536 companies concerned believe that the Luxembourg market is sufficient for them. Administrative formalities were cited by only 24% of them.
The Chamber of Skilled Trades and Crafts has also taken on twice as many administrative procedures for companies wishing to go abroad in two years. To continue to guide them, it is planning a series of webinars on the subject between 15 and 18 November.
This story was first published in French on Paperjam. It has been translated and edited for Delano.