Dark clouds on the German labor market: Researchers at the Nuremberg Institute for Employment Research paint a gloomy picture for the near future. Unemployment will rise on average this year and next year. Employment will only rise slightly – and that is only thanks to public services and part-time work. In industry, the number of employees is declining.
The number of employed people will only increase slightly by 170,000 in 2024 and by 180,000 in 2025, the IAB predicts. According to the IAB forecast, gross domestic product will decline by 0.1 percent in 2024 as a whole and grow only slightly by 0.4 percent in 2025. “The regular strong employment growth of the past decade will no longer be achieved,” said IAB researcher Enzo Weber.
For 2024, the IAB predicts a comparatively weak increase from 160,000 to 34.95 million employees subject to social insurance contributions. For 2025, only a slight increase of 170,000 to 35.12 million people is also expected. Nevertheless, this is a new record high. The increases are based solely on part-time employment, while the number of full-time employees subject to social insurance contributions will fall slightly in both years.
Gradual job cuts
Unlike in the public sector, health and education sectors, the IAB expects employment to decline in industry and construction. “Employees are being kept because they are difficult to get back. This secures income and protects the economy from a severe recession. But industry in particular is continually losing production and employment,” said Weber. There is a gradual reduction in employment there, and fewer new hires are being made.
The number of unemployed will rise by 170,000 in 2024 and by another 60,000 in 2025. “The job prospects of the unemployed, which collapsed again at the start of the pandemic and in 2022, have not recovered sustainably. Despite the high demand for labor, there are signs of consolidation here,” explained Weber.
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