Germany Sees Improvement in Labour Market, Despite Ongoing Shortages
BERLIN, Dec 19 (Reuters) – Labour shortages in Germany have eased compared to last year, according to a survey by the DIHK Chamber of Commerce and Industry, signaling a resilient labour market that is beginning to feel the effects of economic slowdown.
Germany continues to face significant labour shortages, particularly in skilled sectors, which are impacting businesses across the country. The DIHK survey, which covered 23,000 companies, revealed that 43% of firms are struggling to fill vacancies, down from 50% last year. This comes as unemployment in Germany rose to 2.86 million in November, with the Federal Employment Agency (BA) predicting the figure could exceed three million for the first time in a decade by early 2025.
In response, Labour Minister Hubertus Heil is pushing to extend the maximum duration of short-time work allowances from 12 to 24 months, according to a draft regulation seen by Reuters. Despite the rise in unemployment, which is forecasted to reach 6% in 2024, skilled labour shortages persist, with many businesses unable to find employees with the necessary qualifications.
Currently, about 1.5 million jobs remain vacant across the country, a slight decrease from 1.8 million last year. However, many companies are facing difficulties matching job openings with available candidates, as there is a mismatch between the skills employers need and those that workers possess.
Additionally, businesses are becoming more cautious in their hiring plans. A separate survey from the Ifo Institute revealed that fewer companies are expanding their workforce, with an increasing number considering job cuts. The manufacturing sector is particularly affected, with high energy costs, economic uncertainty, and intense international competition dampening demand for workers.
In the construction industry, 53% of companies are struggling to fill positions, while civil engineering firms report even higher difficulties, at 61%. The service sector also faces significant challenges, with more than 40% of companies unable to fill vacancies.
As Germany navigates these labour market challenges, discussions about how to revive the economy will be a key issue in the upcoming national election on February 23.
