Inflation, the energy crisis and other consequences of the Ukraine war are increasingly threatening to affect the hitherto robust labor market. But not only Germany is affected by this development.
In October, the labor market barometer of the Nuremberg Institute for Labor Market and Occupational Research (IAB) fell for the sixth time in a row, as the institute announced today. After a minus of 0.3 points compared to the previous month, the barometer is at 100.2 points and thus only slightly above the neutral mark of 100 points.
The labor requirement, which is measured using the employment component of the barometer, fell by 0.5 points, but at 103.3 points it is still slightly above the 100 mark. However, the unemployment component is now at 97.2 points and thus well below 100. This indicates an imminent reduction in the workforce. The barometer is a leading indicator. All German employment agencies are asked about their expectations for the next three months.
Personnel requirements decrease
With its job index BA-x, the Federal Employment Agency determines a seasonally adjusted indicator of the willingness to hire. This also fell by three points to 128 points in October, just one point above October 2021. “Against the background of economic and political uncertainties, the need for personnel is continuing to decrease noticeably,” the Federal Agency assesses the situation. The agency will release its labor market statistics for October the day after tomorrow.
“At the moment scarcity meets crisis,” says Enzo Weber, head of the IAB research department for forecasts and macroeconomic analyses. “Because there is a shortage of workers, companies are keeping their employees even during the energy crisis. However, hiring plans are being scaled back somewhat,” he continues. Additional risks from a possible worsening of the energy crisis remained.
ILO: The labor markets in other countries are also suffering
The job markets worldwide are under pressure with the crises caused by Corona, climate change, conflicts and the war against Ukraine. The International Labor Organization (ILO) reported today in Geneva that the initial recovery from the pandemic has slowed down over the course of the year.
It assumes that in the third quarter 1.5 percent fewer hours were worked than in the same period before the pandemic. That corresponds to 40 million full-time jobs. The main reasons are disruptions in the labor market in China due to the zero-Covid policy there and the consequences of the Russian war against Ukraine.
The situation in Ukraine is dramatic: 10.4 percent of those employed in Ukraine before the war, a total of 1.6 million people, are now refugees in other countries. A good quarter of them (28 percent) have found work in the host countries. This has consequences for both Ukraine and the host countries: Because it is mainly women who are fleeing, many of whom work in the education, health and social sectors, there is now a shortage of staff in Ukraine. In host countries, the influx of so many Ukrainian women could “lead to political and labor market destabilization.”
In Germany, unemployment is already increasing due to immigration. According to Weber, however, this is a temporary effect: “The immigration from the Ukraine suddenly increases the labor force potential in Germany and thus initially unemployment and – with a greater time lag – employment”.