In spring 2022, all economic sectors reported an increase in their impact compared to the last survey in autumn 2021. The service sector remains the leader, with one in two companies currently complaining about a lack of skilled personnel. This figure is 48 percent in April 2021, compared to 44 percent in October 2021. The manufacturing sector, at 40 percent (36 percent), has reached the highest proportion of affected companies in 30 years. In construction, 36 percent (33 percent) of companies are lacking skilled personnel. skilled workers, while in retail it is 34 percent (33 percent).
The new record shortage of skilled workers coincides with the highest number of job openings in Germany since reunification, reported by the Federal Employment Agency in April. Despite various crises, companies are not lacking demand. Many firms are therefore continuing to hire, even though international supply bottlenecks for raw materials and intermediate products, sharp increases in energy and material prices, and the consequences of the war in Ukraine are weighing on the economic outlook.
“Don’t just think about raw materials”
At the same time, demographic change in Germany is already in full swing and is hitting the labor market with increasing force: the working population will shrink at an accelerated rate between 2025 and 2035, by approximately 500,000 people (approximately 1 percent) per year.
"The labor market figures and those of the KfW-ifo Skilled Workforce Barometer make it clear: It would be a mistake to think only of raw materials and intermediate goods from abroad when it comes to bottlenecks that are hindering the recovery. The shortage of skilled workers also has significant effects – which will probably be even more serious in the longer term,"
says Fritzi Köhler-Geib, Chief Economist of the KfW Banking Group.
“Greater utilization of the labor force potential in Germany”
Without countermeasures, the shortage of skilled workers will significantly impair the growth potential of the German economy by the middle of this decade.
"The clock is already ticking for containment – because the challenges have become significantly greater: The accelerated energy and transport transition, the need to catch up with digitalization, the growing demand for labor in the health and care sectors as well as in childcare and education, the housing shortage in metropolitan areas, the high investment needs in public infrastructure, and the growing number of retirees who need to be supported are creating new demand for labor. Improvements to the German strategy for securing skilled workers and its consistent implementation are therefore urgently needed to meet the challenges."
said Köhler-Geib. She continues:
"This includes even greater exploitation of the labor force potential in Germany and the further opening of the labor market to immigration, especially to non-academic skilled workers, accompanied by intensive language training and the simplified recognition of foreign professional qualifications."
The KfW-ifo Skilled Workforce Barometer is published twice a year, in early summer and autumn. The current issue can be found here.
