Germany’s crisis of labour is getting worse as increasing number of companies across Europe’s largest economy face staff shortages, according to a latest business survey by the Munich-based Ifo Institute released on August 16.
The survey found more than 43 per cent of nearly 9,000 firms polled suffering from a lack of qualified workers in July — up from just over 42 per cent in April. The all-time high of almost 50 per cent was reached in July 2022.
“Despite a sluggish economy, many companies are still desperately searching for suitable employees,” Ifo’s Stefan Sauer said in an emailed statement, Bloomberg reported.
Germany went through a period of recession during the winter of 2022 and 2023 after energy prices went up due to cumulative effects of the Russian offensive in Ukraine.
The inflation has since stagnated. It has also dragged down in particular by a decrease in manufacturing. But at present, the services sector is also emerging as particularly weak.
Ifo said the service sector has been hit particularly hard, with three-quarters of legal and accounting companies are also not finding the applicants they need. There were also record shortages for transportation, architecture, and engineering.
Besides, nearly 41 per cent of machinery and equipment makers reported labour deficits. Overall number for the manufacturing industry improved slightly to just under 35 per cent.
The working-age population in Germany actually peaked towards the end of twentieth century. The country, however, has managed to ward off the demographic decline for last couple of decades due to arrival of millions of immigrants and the rising number of women going to work.
Both the trends are now subsiding as baby-boomers begin to retire.
What does it mean?
It simply means that the German economy will be more reliant on increasing the productivity of the workers amid growing anti-immigrant sentiment.
Politically, the far-right Alternative for Germany (AfD) is riding high in the polls and has been blamed for driving anti-immigrant push, a charge the AfD has vehemently denied.