The crisis is becoming more likely, but the majority of companies want to increase the workforce. However, the willingness in the individual sectors differs. The construction industry is looking for employees, the situation in industry is clouding over and the mood in retail has already turned.
Despite the threat of recession, German companies are on the lookout for new employees. The employment barometer fell by a minimal 0.1 to 101.0 points in August, as reported by the Munich IFO Institute in its monthly survey of 9,000 managers. “However, companies in Germany are still planning to increase the number of employees despite many uncertainties,” said IFO expert Klaus Wohlrabe. “The shortage of skilled workers makes it difficult to fill many vacancies at the same time.”
In industry, however, the employment barometer has fallen for the third time in a row. “There is only a slightly positive willingness to hire,” according to the IFO researchers. In the service sector, on the other hand, the indicator recovered somewhat from the sharp decline in July: while the IT industry is constantly looking for new employees, the hospitality industry would like to keep the number of employees the same for the time being. “In retail, the decline in customers and increased costs are slowly being reflected in personnel planning. There are the first layoffs,” it said. Individual new hires are therefore planned in the construction industry.
After mini-growth in the spring, the signs in the German economy point to a recession. The alarm signal is that the mood in the executive floors in August has deteriorated for the third month in a row. High inflation, the smoldering gas crisis in the wake of the Ukraine war and the still unresolved supply chain problems are weighing on the mood – as can be seen from the IFO business climate index, which fell by 0.2 points to 88.5 points in August. This is also the lowest level since June 2020.
The IFO Institute assumes that gross domestic product will shrink by around half a percent in the current third quarter. Other economists also expect a recession in the second half of the year.
