Less short-time work in Germany signals a mild winter recession

Less short-time work in Germany signals a mild winter recession

printing house

The print shops are affected by short-time work with 2.5 percent (3,000 people).

(Photo: imago images/Westend61)

Berlin Despite the looming winter recession, companies have so far not acted on a large scale, unlike in the corona crisis short-time work return. In December, 186,000 people were on short-time work, around 2,000 fewer than in November, according to estimates by the Ifo Institute published on Wednesday based on data from the Federal Employment Agency.

That corresponds to 0.6 percent of the workforce. “The fact that short-time work remains at a low level seems to indicate that the expected winter recession will be very mild,” said Ifo researcher Sebastian Link. Most economists assume that the German economy will shrink at the end of 2022 and in the current first quarter of 2023.

The proportion is particularly high in the paper, leather and textile industries with 4.5 percent or 16,000 short-time workers. The automotive industry follows with 4.0 percent or 38,000 people. 3.2 percent are in metal production and processing, which corresponds to 9,000 employees.

Among manufacturers of metal products, 3.0 percent or 25,000 people are affected. Next come chemicals/pharmaceuticals/rubber with 2.6 percent (23,000 people) and printing with 2.5 percent (3,000 people).

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“Compared to the Corona winters, the level of short-time work is very low,” said Link. In December 2021, the total number was 770,000 short-time workers or 2.3 percent. At the peak in April 2020, it was even six million or 17.8 percent. Short-time work is a type of part-time unemployment, especially when there is a lack of orders. Employees receive short-time work benefits for the hours lost.

the labour market So far, despite the energy crisis, high inflation, material shortages and geopolitical uncertainties such as the Russian war against Ukraine, it has remained surprisingly robust. The number of employed persons in Germany even reached a record high in November: At around 45.9 million, more people were employed than ever before, as determined by the Federal Statistical Office.

Experts assume, however, that the employment peak will soon be reached, as the baby boomers reach retirement age.

More: Rising inflation is a challenge for manufacturers and suppliers

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