Germany’s Labor Market Shows Signs of Corona Recovery

Corona crisis: “consequences visible but shrinking”

The consequences of the coronavirus crisis in Germany’s labor market remain visible but are shrinking according to the German Federal Employment Agency (BA). “Unemployment and unemployment are declining substantially, with employment and company demand for new personnel increasing as use of short-time working hours continues to fall. 

Unemployment rate down to 5.2 percent

The fall revival in the country’s labor market has saw the unemployment rate go down 0.2 percent to 5.2 percent (0.8 percent lower than in October 2020). The spike in unemployment levels created by the Covid-19 pandemic has not yet been fully reversed, but continues to shrink. Underemployment (including labor market policy change considerations and short-term inability to work) is 397,000 down on October 2020 levels, with over three million people still not working at full capacity.

Unemployment at pre-crisis levels in some regions

In some regions including Vorpommern-Greifswald, unemployment levels have in fact returned to pre-crisis levels. “With an employment rate of 7.6 percent, unemployment remains below the pre-corona level in October as well” said Klaus-Peter Köpcke of the Greifswald BA. The effects of the Covid-19 pandemic have almost been offset in Greifswald according to Köpcke, although the number of long-term unemployed in the region has not yet returned to pre-crisis levels.

Short-time work levels dropping and gainful employment up

According to BA data, uptake of short-time working measures fell to 760,000 in August 2021, significantly below the April 2020 peak of six million people in short-time work. Gainful employment based on social insurance contributions increased by 31,000 between August and September, taking the number of people in gainful employ to 45.2 million (267,000 higher than the previous year).

Demand for staff growing

According to the German Economic Institute (IW), the number of seasonally adjusted job openings in September exceed 2020 levels by 42 percent – eight percent higher than in the pre-crisis year 2019. In the third quarter of 2021 alone, the number of new job openings grew by almost 13 percent across all job levels. Moreover, the labor market recovery is evident in almost all occupational areas according to IW research. In October, 809,000 new positions were reported to the BA – 206,000 higher than in October 2020. The agency’s BA job index – which gauges labor demand in the country – increased by 126 points in October, taking it 29 points higher than the same period in the previous year.