Agency Report –
Nuremberg – Unemployment in Germany is likely to fall in the coming years, researchers said on Wednesday – but the country’s labour shortage is set to grow due to demographic changes as skilled workers retire in greater numbers.
The Institute for Employment Research (IAB) said the number of working people is likely to rise by 10,000 in 2025 before dropping by 20,000 next year.
“The shortage on the labour market is increasing and the retirement of baby boomers can no longer be compensated for,” said IAB analyst Enzo Weber.
The Nuremberg-based institute expects the German economy to grow by 0.2% in 2025 and 1.1% in 2026.
Unemployment is set to rise by 160,000 in the current year before declining next year, according to the IAB’s forecast.
Germany’s labour market is undergoing a marked shift, with fewer jobs available in manufacturing and growing opportunities in the public sector, the institute said.
“The upheavals of the transition combined with weak foreign trade due to US customs policy are putting pressure on the manufacturing industry in particular,” said Weber.
The sector is set to lose 130,000 jobs in 2025 and a further 70,000 in the following year, the IAB predicted.
In contrast, the institute said public services, education and health care could add 210,000 positions this year, with another 130,000 expected in 2026, due to the expansion of childcare and an ageing society.
