Next year, 38% of companies in Germany plan to reduce staff. This is the result of a survey by the Institute of the German Economy among more than 2,000 companies, which was published on Thursday. Only 17% of them plan to hire more employees.
The weak year for the German economy has also been noticeable on the labor market – for the first time in eight years, the unemployment rate has risen above six percent. The employment prospects are thus as bad as they have not been since the global financial crisis of 2009.
According to the assessment of the economic researchers, the industry looks particularly bleak: Here, only 14% of the companies plan to hire more employees, while 44% of the companies surveyed in the industry plan to reduce staff. Pessimism also prevails among service providers: They had stabilized the labor market in recent years, now 35% of the companies plan to reduce their personnel. Only 23% of the service providers plan to hire additional employees.
Improvement is not in sight, according to the IW: By 2025, two out of five companies expect worse business, and only one-fifth expects an improvement. The companies’ dwindling confidence in their location is also reflected in their investment expectations: 40% plan to invest less, and only 23 plan to invest more.