Economists fear difficult times for the job market

The Corona crisis hits the job market. Experts believe that what has been achieved is laboriously wiped away. The number of bankruptcies could also go up.

Nuremberg (dpa) - Economists from leading German financial institutions fear that the Corona crisis will have a significant and lasting impact on the job market and the economy.

"I expect a clear rise in the unemployed of seasonally adjusted 180,000 in May," said Katharina Utermöhl from Allianz in a survey by the German Press Agency. This would have lost 500,000 jobs in just two months. "The entire positive development of the past five years on the job market would then be erased," said Utermöhl.

"The labor market in Germany reacted violently to the outbreak of the corona pandemic and the associated lockdown," said Jens-Oliver Niklasch from Landesbank Baden-Württemberg (LBBW). "If the signs are not misleading, the unemployment rate will rise to over six percent in May and the number of three million is approaching. That was the last level in 2016." With ten million people applying for short-time work, another wave threatens. "If the economy does not pick up in time and is strong enough, the path from short-time work to unemployment will lead to many of them." The hospitality and retail sectors in particular are at risk, said Niklasch.

The chief economist of the KfW banking group, Fritzi Köhler-Geib, also sees dangers particularly in these sectors. "In particular, the continuing restrictions on consumer-related services such as hospitality, retail, tourism and the cultural and creative industries often prevent adequate business there," she emphasized. "The longer this stays, the more short-time workers will lose their jobs and the more companies and self-employed will have to give up."

According to Allianz expert Utermöhl, an increasing number of bankruptcies can be expected. In her forecast, she expects growth of 10 percent in bankruptcies. But Germany is still well served - also thanks to the robust intervention by the state. In the rest of the eurozone, the number of bankruptcies will even climb by 20 percent.

Marc Schattenberg from Deutsche Bank also believes that Corona could leave permanent damage. According to his forecast, gross domestic product will contract by nine percent this year. This goes hand in hand with rising unemployment. "Short-time work is helping a lot right now," he said. However, it is feared that many solo self-employed people will have to give up at some point. At the same time, companies would be more careful when hiring. "The number of vacancies is falling sharply," said Schattenberg.

The Federal Employment Agency in Nuremberg wants to announce its labor market statistics for May this Wednesday (June 3). New figures on short-time work are also expected.