ifo Institute: More Short-Time Work in German Industry

Short-time work is on the increase in German industry. This is the result of the latest survey conducted by the ifo Institute. The survey found that 5.5 percent of companies in the manufacturing sector have already introduced short-time work, compared with only 3.8 percent in June. As many as 12.4 percent expect to introduce short-time work in the next three months; the corresponding figure in June had been only 8.5 percent.

“This means that the number of companies with short-time work has now reached a level last recorded at the height of the 2012/2013 recession. Back then, the number of short-time workers rose to almost 100,000,” says Timo Wollmershaeuser, Head of ifo Economic Forecasts. “Short-time work is a choice method when companies want to retain their skilled workers despite difficult economic times. And from an economic perspective, the short-time allowance is one of the automatic stabilizers through which state benefits at least partially compensate for wage and salary losses during a phase of economic weakness.”

According to the ifo survey, short-time work in German industry is currently concentrated in seven sectors. The textile industry is hardest hit, with a share of 20 percent of companies, followed by companies that manufacture electrical equipment (11 percent) and companies in metal production and processing (10 percent) as well as companies that manufacture metal products (9 percent). The figure is 7 percent for mechanical engineering and for cars and car parts and 6 percent for companies that manufacture paper, cardboard, and goods thereof.