A poll shows that the number of jobs has dropped for the first time in three years.
On Wednesday, the German Ifo Institute for Economic Research told Bloomberg that hiring has stopped because the economy is worsening. Germany is still dealing with an energy problem and rising borrowing costs.
This month, a measure of hiring activity fell to its lowest level since February 2021. A study showed that this is because companies in manufacturing and construction are thinking twice about hiring new workers.
Klaus Wohlrabe, in charge of polls at Ifo, said, “The strong job growth of the past few months has stopped.” “Because there are not enough orders, companies are careful about filling open jobs.”
Economists say that the German labour market, which had been “very resilient” until now, is starting to show signs of weakness as the economy slows down. Experts say that unemployment will continue to rise until the economy gets better.
“When the economy gets better, companies will probably be more willing to hire new people,” Wohlrabe said. “Over the next few years, demographic changes will remove more and more workers from the job market.”
Last week, a separate poll of purchasing managers showed that hiring in the EU’s largest economy fell for the first time in nearly three years; this is happening at a time when businesses and industry are getting more and more worried about Germany’s economic future; this is because of weaker foreign demand and a lack of orders, as well as a need for qualified workers and tighter monetary policy.
After shrinking by 0.3% in the year’s first quarter, Germany’s economy officially went into a formal recession. Its GDP will likely fall by another 0.5% by the end of the year.