ifo Institute: 50 Percent of German Companies Are Using Short-Time Work
During the coronavirus crisis, 50 percent of German companies are introducing short-time work, while 18 percent plan to cut jobs. This is the preliminary result of the latest survey conducted by the ifo Institute in April. In trade, employees at 55 percent of companies currently have short time work arrangements, in manufacturing 53 percent, in the service sector 48 percent, and in construction only 37 percent. “For many companies, short-time work is the method of choice for cushioning short-term sales losses and retaining their workforce,” says Klaus Wohlrabe, Head of Surveys at the ifo Institute.
For companies to be able to apply for short-time work, employees must first use up their overtime and time credits. A total of 69 percent of all companies have done so. In manufacturing, 78 percent of companies have taken this step, in trade 68 percent, in the service sector 65 percent, and in construction 54 percent.
Plans to lay off employees or not extend fixed-term jobs are on the agenda at 18 percent of companies. Broken down by sector, this is the case for 20 percent of companies both in manufacturing and the service sector, 15 percent in trade, and just 2 percent in construction. Of the companies surveyed, 46 percent plan to postpone investments. This translates to 56 percent of companies in manufacturing, 44 percent in the service sector, 38 percent in trade, and 31 percent in construction.
On average, the companies expect the restrictions on public life to last around 3.9 months. A total of 15 percent of companies are experiencing closures and halts in production – 23 percent of the companies in trade, 19 percent in manufacturing, 12 percent in construction, and 10 percent in the service sector.
While 84 percent of companies are seeing a decline in sales due to the coronavirus crisis, just 4 percent are seeing an increase and 12 percent perceive no difference. Less than half (45 percent) of the companies believe that they can partially make up for the decline in the future. Supply problems for key intermediate products are plaguing 41 percent of companies in manufacturing and 53 percent of companies in trade. At present, 36 percent of companies are taking advantage of tax deferral or a reduction in advance payments, and another 32 percent are planning to do so.
Virtually the only winner in the coronavirus crisis is working from home, with 76 percent of companies increasing use of this option. This affects 87 percent of companies in manufacturing, 76 percent in the service sector, 67 percent in construction, and 60 percent in trade.
