Companies in Germany are revising their workforce plans due to a lack of customers and orders, as shown by a key early indicator for the job market. However, there are exceptions.
German companies are showing greater caution in their workforce planning. According to the Ifo Institute, significantly more firms in industry and commerce are planning to reduce jobs rather than hire new staff. The Ifo Employment Barometer fell for the third consecutive month in August, now standing at 94.8 points, down from 95.3 points in July.
“The weak economic development is also reflected in weak employment trends,” says Klaus Wohlrabe, Head of Surveys at the Ifo Institute. “The lack of orders is slowing down companies in their recruitment efforts.”
Each month, the Ifo Institute surveys around 9,500 companies, asking whether the number of their employees is expected to increase, decrease, or remain roughly the same over the next three months. The Employment Barometer is considered a crucial early indicator for the German job market.
Industry in Germany Facing Crisis
In the industrial sector, the barometer has fallen deeper into negative territory. “More and more companies are considering job cuts,” the economic researchers report. A similar trend is evident in the retail sector, where customer numbers are dwindling.
Despite the crisis, the construction industry is expected to retain its workforce. A slightly positive hiring trend is observed among service providers, particularly in the IT sector and tourism.
