Ifo Institute Survey Reveals Declining Skills Shortage in Germany Amid Economic Weakness

Mon 17th Feb, 2025

The latest survey conducted by the Ifo Institute for Economic Research indicates a reduction in the skills shortage in Germany, attributed primarily to a sluggish economy. As businesses face decreased demand for skilled labor, the percentage of companies reporting insufficient qualified personnel has dropped from 31.9% in October to 28.3% in the latest findings.

Klaus Wohlrabe, an economist at the Ifo Institute, noted that while the perception of the skills shortage has lessened, the demographic shift continues to pose significant challenges for the labor market. He emphasized that the long-term outlook suggests a potential resurgence in the skills gap as demographic trends evolve.

Despite the overall decline in reported shortages, certain sectors are experiencing acute difficulties in finding qualified employees. The survey reveals that 35.1% of service providers are struggling to recruit suitable candidates. In specialized fields such as legal and tax consulting, as well as auditing, around 75% of companies report an inability to find adequately skilled personnel. The hospitality industry is similarly affected, with approximately 42% of businesses facing challenges in staffing appropriately.

The findings underscore the complex landscape of the German labor market, where economic conditions directly influence employment dynamics. While the current economic slowdown may temporarily alleviate some pressures, the underlying issues related to demographic change and the need for skilled labor remain pivotal. The Ifo Institute highlights the importance of addressing these challenges proactively to ensure sustainable economic growth in the future.


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