In Germany, the shortage of skilled workers has decreased but remains historically high. At the start of the second quarter of 2025, 27.2% of businesses reported challenges due to staff shortages, a decrease from nearly 32% in the fourth quarter of 2024 and 49.7% in the summer of 2022. The decline is attributed to Germany's weak economy, which has resulted in reduced sales and orders, layoffs, and hiring freezes, especially in manufacturing. Additionally, uncertainty regarding US administration policies is affecting businesses.
These insights come from the KfW-ifo Skilled Labour Barometer, which evaluates ifo economic surveys by polling around 9,000 enterprises quarterly, including 7,500 small and medium-sized enterprises (SMEs).
Dr. Dirk Schumacher, Chief Economist at KfW, stated: "Skills shortages remain a barrier to growth for a substantial share of businesses. The fact that fewer businesses currently feel that this is a serious problem is only a snapshot." He further warned: "Skills shortages will intensify again in the coming years if the economic situation improves as predicted. Countermeasures such as increasing labour force participation and boosting skilled migration and productivity growth must be urgently taken."
In manufacturing, reports of skills shortages have dropped significantly from their peak in 2022 (from 44.5% to 17.9%), though these numbers are still higher than historical averages; between 1991 and 2010 only about 3.7% of manufacturing enterprises reported issues with skilled labor shortages.
The services sector continues to experience pronounced skills shortages despite some reduction. As of now, worker shortages affect 32.9% of service providers compared to 39.1% in late 2024. Specific sectors like law and tax consulting face acute challenges with skills shortages impacting 64.6%, while over 40% of road and rail transport services also report difficulties.
Within the industrial sector, garment manufacturers currently report no impact from worker shortages (0%), whereas furniture (9.7%) and pharmaceutical product manufacturers (10%) face relatively minor impacts. Conversely, leather goods producers (55%) and metal products manufacturers (26.5%) continue to experience severe challenges.
The KfW-ifo Skilled Labour Barometer is released biannually during early summer and autumn.