As of: February 29, 2024, 5:37 p.m
By: Momir Takac
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The economy in Germany is in crisis.
The labor market is increasingly feeling the effects of this.
Clues are increasing.
Munich – Things are currently not going well for the German economy.
At the end of 2023 and for the year as a whole, the gross domestic product (GDP) in Germany fell by 0.3 percent.
The economic downturn threatens to turn into a recession.
Because the near future also looks rather bleak.
There is a threat of job cuts: Ifo employment barometer at lowest value in three years
The German Institute for Economic Research (DIW) also predicts a contraction in GDP for the first quarter of 2024 compared to the same period last year.
This would fulfill the conditions for a recession.
But other factors also suggest that the economic downturn will not recover for the time being.
For example, the employment barometer from the Munich Ifo Institute.
Economists do not rule out job cuts.
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Jan Woitas
In February this fell to its lowest value in three years.
It fell to 94.9 points - after 95.5 in January and 96.5 in December.
This can be seen as a sign that companies are planning to hire fewer staff.
“The weak economic development is making companies hesitant about hiring new employees,” said Ifo survey director Klaus Wohlrabe of the German Press Agency.
Ifo economist: “Job cuts are no longer ruled out”
The Munich economic researchers survey 9,500 industrial, construction, commercial and service companies every month about their personnel plans for the next three months.
The barometer was last as low as it is now during the pandemic in February 2021. “The reduction of jobs is no longer ruled out,” Wohlrabe continued.
In addition to industry, there is also a risk of staff cuts in retail.
For service providers, the barometer is still slightly positive, but the pace of hiring has weakened significantly, according to the Ifo Institute.
More unemployed, more short-time work, fewer vacancies
The traces of the weak economy are also becoming clearer on the labor market.
The number of unemployed people in Germany rose by around 8,000 to 2.814 million people in February compared to the previous month.
Compared to February last year, 194,000 more people were unemployed.
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“Unemployment and underemployment are increasing in February and the demand for workers is falling,” said the CEO of the Federal Employment Agency (BA), Andrea Nahles.
The number of reported vacancies fell by 72,000 to 706,000 compared to the previous year.
In addition, according to the BA, companies announced short-time work for 58,000 people from February 1st to 25th - a significant increase compared to January.
(mt)