Will the German labor market remain tight?
Even though German unemployment figures have risen due to the weak economy, labor remains scarce in many areas.
02/14/2025
Weak economy weighs on labor market, ...
For several years, the labor shortage has been a major problem for German companies. It has probably been one of the factors why the German economy has underperformed the eurozone average in recent years. After five years with economic stagnation, the labor shortage now appears to be coming to an end. The number of unemployed has been rising gradually for almost three years and the number of people in employment has stagnated. In addition, various large companies have announced massive job cuts.
... but labor is still scarce in many areas, ...
However, labor is still in short supply in many areas. This is shown by the EU Commission's surveys. For example, the proportion of companies in the service sector where a shortage of labor is preventing an expansion of business activity has hardly fallen so far and remains well above its long-term average. In view of the problems in manufacturing, the labor shortage in this sector has decreased significantly over the past year and a half. But here too, it still affects more companies than for much of the past 20 years.
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