Businesses in Germany are reporting fewer constraints due to skilled labour shortages, according to the latest KfW-ifo Skilled Labour Barometer. In October 2025, 25.8 percent of companies said their operations were limited by a lack of workers, down from 31.9 percent in the fourth quarter of 2024 and significantly lower than the peak of 49.7 percent recorded in summer 2022.
The decline is attributed mainly to continued economic weakness, with the industrial sector experiencing the most notable drop in both production and sales. The latest data shows that only 17.1 percent of businesses in this sector are affected by worker shortages.
The KfW-ifo Skilled Labour Barometer draws on quarterly surveys conducted by ifo, polling around 9,000 enterprises—including about 7,500 small and medium-sized enterprises (SMEs).
Service industries continue to face challenges finding staff; however, the situation has improved somewhat. Currently, 30.2 percent of service-sector businesses report difficulties hiring employees. In catering specifically, the proportion fell from 40 percent in April to 26.7 percent.
In contrast to other sectors, the main construction industry has seen an increase in skills shortages. The share of businesses reporting disruptions due to lack of skilled workers rose from 27.3 percent in April to 31.6 percent recently, suggesting a rebound in construction activity during the second half of the year.
Despite recent improvements across most sectors, many companies still struggle to fill vacancies—a problem exacerbated by demographic changes such as an aging workforce and lower birth rates leading to fewer potential workers entering the labor market.
Vacancy durations have reached new highs: it now takes an average of 161 days for a business to deregister a job vacancy with the Federal Employment Agency—up from just 56 days in October 2010.
“We expect the German economy to gather steam next year. Skilled labour shortages will then worsen again as well. That is why increasing labour force participation in Germany and enabling skilled migration must remain an important policy objective,” said Dr Dirk Schumacher, Chief Economist of KfW.
The KfW-ifo Skilled Labour Barometer is published twice annually—in early summer and autumn—with its current edition now available.