At the beginning of the fourth quarter, nearly 32% of businesses in Germany reported being affected by skills shortages. This marks a decrease from early April when 35% of enterprises expressed concerns about a lack of skilled workers. The highest point was in autumn 2022, with 45.7% of businesses experiencing such shortages.
The industrial sector has seen the most significant reduction in demand for labor, correlating with declines in sales and orders. However, 21% of industrial businesses still report disruptions due to skills shortages, which is double the long-term average since 1991, where only 9.7% faced such issues.
In contrast, sectors like wholesale and main construction have experienced slight increases in skilled labor shortages despite an economic slowdown.
These insights are derived from the KfW-ifo Skilled Labour Barometer, which evaluates Ifo economic surveys. Approximately 9,000 enterprises, including 7,500 small and medium-sized enterprises (SMEs), participate in these quarterly surveys. The latest data collection occurred in early October.
The services sector is notably impacted by skills shortages, with 39.1% of businesses reporting difficulties. Among them are law firms, tax consultancies, auditing firms (73.6%), road and rail transport services (over 50%), and accommodation providers (nearly 50%).
Overall, SMEs are as affected as large enterprises by these shortages at rates of roughly 32.1% and 31.5%, respectively.
Martin Müller from KfW Research commented on the situation: “Skilled labour shortages continue to act as a brake on growth for a substantial share of businesses. The drop in the number of affected enterprises is therefore no reason to sound the all-clear."
Müller further noted that "skills shortages will worsen again in the coming years as the economic situation improves and baby boomers begin to reach the age of retirement." He emphasized that addressing this issue requires expanding labor market participation, increasing skilled migration, raising labor productivity growth rates through investment in physical assets and human capital, and strengthening economic innovation capacity.
The KfW-ifo Skilled Labour Barometer is published biannually during early summer and autumn.