Recent data indicates a cooling trend in Germany’s labor market, with companies increasingly cautious about personnel planning. The Ifo Employment Barometer, a closely watched indicator of employment expectations, registered a slight decrease in August, falling to 93.8 points from 94.0 in July.
Klaus Wohlrabe, head of Ifo surveys, noted that the labor market continues to struggle, attributing the situation to a stagnating economy that prompts companies to adopt a conservative approach to hiring.
While the manufacturing sector saw a marginal increase in the barometer reading, overall indications still point towards job reductions, albeit at a slower pace than previously observed. Across key industrial branches, layoffs outnumbered new hires.
Within the service sector, the indicator has moved into negative territory. Temporary employment agencies are facing declining demand, while the tourism sector is actively increasing its workforce. The construction industry intends to maintain its current staffing levels. The retail sector continues to reduce personnel, though the rate of decline is easing compared to previous months.