ifo Institute: German Industry Expects Rise in Short-Time Work
German industry expects short-time work programs to expand. This is the result of the latest survey conducted by the ifo Institute. The survey found that 8.5 percent of companies in the manufacturing sector expect to introduce short-time work in the next three months. This is the highest value since the beginning of 2013. A year ago, it was 2.6 percent.
“The economic slowdown is gradually having an effect on the labor market,” says Timo Wollmershaeuser, Head of ifo Economic Forecasts. “German industry has been in recession since the middle of last year. Short-time work is the method of choice when companies want to retain their skilled workers despite difficult economic times.”
According to the ifo survey, 3.8 percent of companies in the manufacturing sector have already introduced short-time work. This is the highest value since mid-2013. At its last low at the end of 2017, this figure stood at only 0.4 percent. Since then it has risen almost continuously.
Initial projections from Germany’s Federal Employment Agency also indicate that, as a result of the economic situation, short-time work programs will expand to cover almost 44,000 people in April 2019. One year before that, only 13,000 workers were affected. For the months of May to July 2019, the Agency is currently assuming a decline in the number of short-time workers. However, these estimates are based only on notifications of short-time work that have already been approved. “The actual figures for short-time work will not be available until much later,” Wollmershaeuser explains. “But given the close statistical relationship between those figures and ifo expectations, it’s likely that the Federal Employment Agency’s preliminary estimates will be revised upwards in the coming months.”
