Business leaders across Germany have expressed growing pessimism over employment prospects for 2025, according to a recent study by the IW Institute.
The survey, which included 49 employers’ federations, revealed that 25 of them expect a drop in employment levels next year, up from 23 in 2024 and 16 in 2023.
This growing concern comes just two months before an early general election, where Germany’s economic challenges are expected to play a significant role.
German Employment Outlook: Key Sectors Affected
The sectors most affected by this pessimism include chemicals, automobiles, machine production, construction, and metalworking.
These industries are facing high costs for energy, materials, and labor. This situation is compounded by bureaucratic hurdles that make it difficult to remain competitive.
Steelmaker Georgsmarienhuette, for instance, has already announced cost-cutting plans and warned that redundancies might be inevitable.
Germany’s central bank has forecasted a modest GDP growth of just 0.2 percent in 2025, following a 0.2 percent contraction in 2024.
This economic outlook has led to a weakening of the “retention effect.” Businesses previously retained staff despite production drops due to a lack of available labor.
The current general economic outlook is considered worse than it was a year ago. Many industries are struggling to stay afloat.
India-Germany Collaboration
In light of these challenges, India’s Ministry of Labour and Employment has recently collaborated with Germany’s government on a Comprehensive Migration and Mobility Partnership.
This partnership aims to create new employment opportunities.
This partnership, signed in December 2022, facilitates the mobility and employment of skilled workers between the two countries.
It includes provisions such as extended residence permits for students, job seeker visas, and streamlined visa application processes.
Despite the overall pessimism, some sectors remain optimistic about employment prospects in 2025.
Pharmaceuticals, aeronautics, energy, and recycling are among the industries expecting an increase in employment.
These sectors are seen as more resilient and capable of adapting to the current economic challenges.
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