The results of a study published by the Ifo Institute showed that amid the weakness of the German economy, companies' hiring plans dropped to a four-year low last month.
The employment barometer fell to 93.7 points in October from 94.0 points in September. The last value was the lowest since July 2020.
“The situation on the labor market has been on a negative trend for months, not sharply, but continuously. Rather than filling vacancies, companies are more likely to lay off employees,” says Klaus Wohlrabe, Head of ifo Surveys.
The data also showed that in manufacturing, the employment barometer dropped again amid weakness in new orders. The picture is similar for trade, although the indicator rose slightly there. Among service providers, positive and negative responses are currently almost in balance, and the trend in employee numbers is expected to remain constant. The same also applies to construction. There is still demand for new employees in tourism and the IT sector.
According to the latest official data, the number of unemployed individuals in Germany rose in October by 27 thousand - the biggest increase in a year - after an increase of 17 thousand in September. Economists had expected an increase of only 15 thousand. Meanwhile, the unemployment rate increased to 6.1% in October, the highest since February 2021, compared to 6% in September.
Last month, Germany's Bundesbank said it forecast economic stagnation in the fourth quarter. For 2024 as a whole, the government expects output to contract by 0.2%, which would mark a second year of decline. Meanwhile, the International Monetary Fund revised its forecast for Germany's GDP for the current year to 0% from +0.2%. For 2025, the IMF forecast Germany's economy would grow by 0.8%.