German businesses are increasingly factoring in reduced staffing levels in their future planning, according to a survey released Friday by the Ifo Institute. The institute’s “Employment Barometer” a key indicator of hiring and staffing expectations, declined to 92.5 points in September, down from 93.8 points in August. This represents the lowest reading since June 2020.
“The sentiment in the labor market remains muted” stated Klaus Wohlrabe, head of Ifo surveys. “Due to the preliminary absence of a significant economic rebound, many companies are exercising caution regarding personnel decisions.
The reduction in staffing isn’t currently manifesting as widespread layoffs, but rather through a deliberate slowdown in replacing vacancies. Large-scale workforce reductions are not presently evident.
While the barometer in the industrial sector experienced only a slight decrease, particularly pronounced are plans for reduced staffing within the automotive and machinery industries. The services sector saw a more substantial decline in the indicator. Within the transport and logistics sector, some companies have already announced staff reductions. The construction sector exhibits relatively stable employment figures, with little observable change. Conversely, retailers are noticeably reducing their workforce, as reported by the Ifo Institute.
