German Firms Face Growing Skills Shortage

German Firms Face Growing Skills Shortage

A recent economic survey published Thursday indicates that the shortage of skilled labor is intensifying for businesses across Germany. The Ifo Institute’s latest business climate survey reports that 28.1 percent of companies are struggling to find qualified workers, a slight increase from 27.2 percent in April.

Ifo researcher Klaus Wohlrabe noted that the scarcity is growing “despite a continuing weak economic climate” and projected a worsening situation in the long term due to demographic shifts.

The service sector remains particularly affected, with 33.7 percent of companies reporting shortages – a marginal rise from 32.9 percent in April. The logistics industry faces acute difficulties, with over half of firms (51.3 percent) indicating challenges in recruitment. Professional services – encompassing legal, tax and auditing – report the most significant need, with 72.7 percent of companies struggling to find adequate staff. This high demand reflects companies’ reliance on support navigating increasing bureaucratic requirements.

However, the IT sector is showing signs of easing, with the proportion of companies reporting shortages declining to 21.3 percent, down from around 50 percent two years ago.

In the manufacturing sector, the percentage of affected firms rose from 17.9 to 19.3 percent, even with many companies cautiously managing personnel planning. Shortages are particularly noticeable in the food industry (26.2 percent), metal product manufacturers (25.3 percent) and mechanical engineering (22.5 percent). The automotive sector is an exception, with reported shortages decreasing significantly from 20.9 to 14.5 percent, likely a result of ongoing restructuring programs.

The retail sector continues to experience recruitment difficulties, with around one in four companies reporting problems filling qualified positions – 25.3 percent in retail and 23.3 percent in wholesale.

Finally, the construction sector is also seeing intensifying shortages, with the proportion of affected companies rising from 27.3 to 28.3 percent.