Even the service providers, who have been building up staff for a long time, were more cautious when it came to hiring.
(Photo: Imago/Westend61)
Berlin The weak economic development and the economic uncertainty in the face of the Ukraine war and high energy prices are also affecting the labor market. The Ifo employment barometer, calculated monthly exclusively for the Handelsblatt, shows that companies are becoming more reluctant to hire new people. The Nuremberg Institute for Labor Market and Occupational Research (IAB) also expects unemployment to increase in the next three months.
“Fewer new orders and increasing uncertainty are triggering restraint among companies,” commented Ifo expert Klaus Wohlrabe on the recent decline in the employment barometer.
The indicator, which is based on the personnel plans of around 9,000 companies, fell to 98.3 points in May – after 100.2 points in the previous month. A worse value was last measured in October 2022.
While companies’ hiring and layoff plans have been roughly balanced for months in industry and construction, there is now a significant setback in personnel growth in the service sector as well.
Economic worries weigh on companies
The IT sector will continue to be hired, while companies in the real estate and housing sector are more likely to consider cutting jobs. In retail, the willingness to hire fell to its lowest level since March 2021. This shows the ongoing reluctance to buy.
On Thursday, the Federal Statistical Office announced that after a decline in the final quarter of 2022, economic output also fell in the first quarter of this year.
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Germany is thus in a so-called technical recession. The Ifo business climate index fell in May and shows growing concerns about the economy among the executives surveyed.
The Nuremberg IAB is therefore also observing a dampening in the willingness of companies to hire, but nevertheless expects further significant growth in employment. The labor market barometer is based on a survey conducted by the Federal Employment Agency (BA) among all local employment agencies. After rising steadily from September 2022 to March 2023, it has now fallen for the second time in a row – from 102.6 points in April to 101.8 points in May.
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“The peak of the energy crisis is over, but the consequences are weighing on economic development,” says IAB expert Enzo Weber. Unemployed people are finding it increasingly difficult to find a new job in economically uncertain times. The corresponding sub-indicator of the barometer points to a further increase in unemployment.
According to the IAB, the number of long-term unemployed is already almost 180,000 above the pre-crisis level of 2019. However, the expected increase in unemployment also has to do with the fact that more and more Ukrainian refugees who are currently still on courses will go looking for work over the course of the year participate and are therefore not counted as unemployed in the statistics.
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