Stefan Sauer

Industrial companies in Germany are increasingly pessimistic about the development of their own competitiveness. In a European comparison, the assessments based on company surveys are significantly lower than in other large EU countries. “Companies’ assessment of their own competitive position is very negative in all industrial sectors, especially when it comes to foreign markets,” says ifo expert Stefan Sauer.  

Fewer companies in Germany are looking to raise their prices. In February, the ifo price expectations slipped to 15.0 points, down from 18.8 points* in January. This was mainly due to the consumer-related sectors, where price expectations fell from 32.4 points* to 28.9 points. “This suggests that in the coming months, inflation will continue to decline,” says Timo Wollmershäuser, Head of Forecasts at ifo.

More of Germany’s consumer-related companies are planning to raise their prices. The ifo price expectations for these industries rose from 32.3 points* in December to 32.9 points in January. Price expectations increased noticeably among consumer-related service providers in particular, from 37.3 points* to 42.1 points. In retail, by contrast, the proportion of companies planning price increases declined; the balance there fell from 30.0 points* to 28.6 points. “This suggests that in the coming months, inflation will subside, but only slowly,” says Timo Wollmershäuser, Head of Forecasts at ifo.

The proportion of companies in Germany that want to raise their prices in the coming months is increasing again. The ifo price expectations rose to 19.7 points in December, up from 18.1 points* in November. Price expectations reached their temporary low in August 2023 at a balance of 14.5 points. “This means the decline in inflation rates is likely to stall for the time being,” says Timo Wollmershäuser, Head of Forecasts at ifo.

Slightly more companies in Germany are planning to raise their prices. The price plans index rose to 18.0 points in November, up from 15.4 points* in October. This is primarily due to business-related service providers and wholesalers, where the balance value climbed from 21.5 points* to 28.3 points. In consumer-related sectors, however, price expectations continued to fall. Among food retailers, the balance fell from 40.7 points* to 34.2 points; among other retailers, from 28.2 points* to 27.7 points; and among consumer-related service providers, from 29.3 points* to 25.5 points. “That means inflation is continuing to decline,” says Timo Wollmershäuser, Head of Forecasts at ifo.

In Germany, fewer companies are expecting prices to rise in the months ahead. Price expectations fell to 15.3 points in October, down from 15.7 points* in September. The most noticeable drop was in consumer-related industries. Among food retailers, the balance fell from 53.0 points* to 41.6 points, among other retailers from 31.8 points* to 28.3 points, and among consumer-related service providers from 35.1 points* to 29.3 points. “This means that consumer prices will still continue to rise. However, the pace will ease off and with it inflation,” says Timo Wollmershäuser, Head of Forecasts at ifo.

Slightly more companies in Germany are planning to raise their prices. After twelve consecutive declines, price expectations went up again in September from 14.7 points* to 15.8 points. “It will be some time before Germany achieves the European Central Bank’s 2% inflation target,” says Timo Wollmershäuser, Head of Forecasts at ifo. Price expectations rose particularly sharply in hospitality, from 49.1 points* to 62.8 points. Among retailers, however, the balance dropped from 33.6 points* to 31.4 points.

More and more German companies are short of skilled workers, finds the latest ifo Business Survey of around 9,000 companies throughout Germany. According to the survey, 43.1% of firms reported suffering from a shortage of qualified workers in July, up from 42.2% in April 2023. “Despite a sluggish economy, many companies are still desperately searching for suitable employees,” says ifo expert Stefan Sauer. The all-time high of 49.7% was reached in July 2022.

Slightly fewer German companies are reporting a shortage of skilled workers at the beginning of the year, according to the latest ifo Institute survey. In January, 43.6 percent of companies said they were affected by the shortage of skilled workers, down from 45.7 percent in October 2022. “Companies still have major concerns about finding suitable skilled workers,” says ifo expert Stefan Sauer. The all-time high of 49.7 percent was reached in July 2022.

The shortage of skilled workers has risen to a new high in Germany, affecting 49.7 percent of companies in July. This finding is based on data collected in conjunction with the ifo Business Survey since 2009. The new level is much higher than the previous record of 43.6 percent, which was set in April.

The number of short-time workers in Germany fell to 277,000 in May, down from 399,000* in April. This corresponds to 0.8 percent of the workforce, down from 1.2 percent* in April. These figures are ifo Institute estimates based on its surveys as well as on data from the German Federal Employment Agency. “This decline runs through all sectors of the economy,” says ifo expert Stefan Sauer. 

In April, the number of short-time workers in Germany took a massive drop: 426,000 people were on short-time work, down from 696,000* in March. This corresponds to 1.3 percent of the workforce, down from 2.1 percent*. These figures are ifo Institute estimates based on its surveys as well as on data from the German Federal Employment Agency. “The most significant declines were again in the contact-intensive industries, which are still recovering from the pandemic,” says ifo expert Stefan Sauer. “In the hospitality industry, the number fell by more than half, while there was also a significant decline in the transport sector. And numbers decreased even in manufacturing, despite the supply shortages.”

The number of short-time workers in Germany declined somewhat in March. A total of 620,000 people, or 1.8 percent of the workforce, were on short-time work, down from 685,000* (2.0 percent*) in February. These figures are ifo Institute estimates based on its surveys as well as on data from the German Federal Employment Agency. “Developments were not the same everywhere,” says ifo expert Stefan Sauer. “In manufacturing, the numbers went up; in retail and hospitality, they went down.”

The number of short-time workers in Germany has fallen slightly. In February, there were 877,000 people on short-time work, compared to 920,000* in January. This corresponds to 2.6 percent of the workforce, down from 2.7 percent*. These figures are ifo Institute estimates based on its surveys as well as on data from the German Federal Employment Agency. “There were opposing developments across various industries,” says ifo expert Stefan Sauer. The ifo survey was completed just before the Russian invasion of Ukraine.

The number of short-time workers in Germany has risen sharply. It rose to 900,000 people in January, up from 780,000 (revised figure) the previous month, to reach 2.7 percent of the workforce, up from 2.3 (revised figure) percent in December. These figures are ifo Institute estimates based on its surveys as well as on data from the German Federal Employment Agency. “The sharp rise in coronavirus case numbers drove up short-time work in hospitality, retail, and other services,” says ifo expert Stefan Sauer. “Manufacturing, though, was a bright spot: short-time work fell here thanks to the improved availability of intermediate products.”  

The number of short-time workers in Germany has risen for the first time since February. In November, it increased to 608,000, up from 598,000 the previous month. This corresponds to 1.8 percent of the workforce.

The number of short-time workers in Germany fell to 504,000 in October, down from 580,000* in the previous month. This corresponds to 1.5 percent of the workforce. Bucking this trend, however, is short-time work in manufacturing, according to an ifo Institute estimate based on its surveys as well as on figures from the German Federal Employment Agency. In manufacturing, the number rose by 20,000 to 226,000 people (3.3 percent). “The bottleneck in intermediate products is really choking off production. With the current order backlog, there ought to be no more than 10,000 employees in manufacturing actually on short-time work,” says Timo Wollmershäuser, Head of Forecasts at ifo.

The number of people on short-time work is continuing to fall, but the pace of this decline has slowed. In September, there were 610,000 people left on short-time work, down from 694,000 in August and 1.07 million in July. This equates to 1.8 percent of dependent employees, compared with 2.1 percent in August and 3.2 percent in July. These figures are ifo Institute estimates based on its Business Survey and on data from the German Federal Employment Agency.

The number of short-time workers in Germany fell notably to 688,000 in August, down from 1.06 million in July. 2.0 percent of dependent employees were still on short-time work, compared with 3.2* percent in July. This is an ifo Institute estimate based on its Business Survey and on data from the German Federal Employment Agency.

In June, the number of short-time workers in Germany decreased heavily from 2.3 million to 1.5 million. This is its lowest level since February 2020. In June, 4.5 percent of dependent employees were still on short-time work, compared with 6.8 percent in the previous month. This is an ifo Institute estimate based on its Business Survey and on data from the German Federal Employment Agency.