Germany is facing a worsening shortage of qualified workers, according to the latest Business Survey conducted by the Munich-based Ifo Institute. The survey, which included nearly 9,000 German corporations, revealed that over 43% of respondents reported a deficit of skilled employees in July, an increase from just over 42% recorded in April. This marks the highest level of skilled worker shortage since July 2022.
Despite a sluggish economy, many companies in Germany are still struggling to find suitable employees. The service sector has been particularly hard-hit, with more than 75% of legal and accounting firms reporting a lack of qualified applicants. Additionally, nearly two-thirds of companies in transportation, architecture, and engineering are also facing a shortage of skilled workers, reaching a new high for these sectors.
The shortage of skilled workers is not limited to specific industries. The survey found that more than 43% of IT equipment manufacturers and about 41% of machinery and equipment makers reported being affected by the shortage. However, there has been a slight improvement in the overall number for the manufacturing industry, which now stands at just under 35%.
Germany’s economy has been under significant pressure, with the country enduring a recession in the first three months of this year. Reduced energy supplies from Russia have played a role in this downturn. Inflation has also been a major concern, with rising prices further impacting the economic performance of the EU’s largest economy.
In June, the Ifo Institute reported worsening business sentiment, highlighting the prospect of a longer downturn as domestic demand and exporters’ expectations weakened. Analysts predict that the German economy will contract by 0.3% this year and may only see a rebound in 2024.
The shortage of qualified workers in Germany could have far-reaching implications for the country’s economic recovery. Without a sufficient number of skilled employees, companies may struggle to meet demand and drive growth. It is essential for initiatives to be implemented to address this issue and ensure the availability of qualified workers in key sectors.
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