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Drivers of a delivery service: Sought-after service providers

Photo: Sebastian Gollnow / dpa

In the economic downturn in Germany, only service providers want to hire more employees, while industry is reluctant. The employment barometer for the economy as a whole rose in June, but only slightly by 0.2 points to 98.4 points. This is according to the Munich-based Ifo Institute in its monthly survey of thousands of companies.

"In industry in particular, the burgeoning pessimism is reflected in cautious personnel planning," says Klaus Wohlrabe, head of the Ifo surveys. "Only the service providers are still thinking about hiring new employees."

  • In the service sector, expectations increased, especially due to developments in the real estate and housing sector.

  • In logistics, the hiring momentum of the previous months has stopped for the time being.

  • In retail, too, the indicator has risen slightly at a low level, but a decline in the number of employees is still expected here, according to the Ifo researchers.

  • In the construction sector, on the other hand, the barometer fell slightly. The industry is struggling with rising interest and material costs. As a result, the construction industry reported a 16.9 percent slump in orders from January to April.

Consequences of the recession

The export-dependent industry, on the other hand, is currently struggling with the weak global economy, which is suffering from the series of interest rate hikes by leading central banks such as the Federal Reserve in the US and the ECB in the EU. This makes loans more expensive for investment.

The German economy has recently shrunk for two quarters in a row and is thus in recession. Leading economic research institutes also expect gross domestic product to shrink overall in 2023. Nevertheless, the labor market is likely to remain robust. Although the number of unemployed will rise by about 130,000 to 2.55 million this year, it will fall again to 2024.2 million in 45, according to Ifo researchers. At the same time, the number of people in employment is expected to rise sharply and reach a record level of 46.07 million next year.