economic weakness
Fewer companies founded and hardly any new jobs
The number of employed people in Germany has risen steadily for over three years. Now this development has come to an end. And many companies are pessimistic about the future.
The weak economy in Germany is increasingly affecting the labor market. The number of companies is declining and pessimism among companies is increasing. Fewer people dare to take the step into self-employment.
Stagnation in the number of employed people
In the third quarter of this year, hardly any additional jobs were created on the German labor market. 46.1 million people were employed between July and September, as reported by the Federal Statistical Office. That was only 23,000 more than in early summer, rounding off stagnation. Adjusted for seasonal effects, the number of employed people fell by 45,000 people or 0.1 percent. This has not happened since the beginning of 2021. Compared to the same quarter last year, the increase was around 66,000 people (0.1 percent).
The office reports that there was only more employment in the service sectors. In industry, 73,000 fewer people (minus 0.9 percent) were registered and in the construction sector, employment fell by 1.1 percent or 30,000 people within a year. In addition, the trend continues that fewer and fewer people are self-employed. Their number, including helping relatives, fell by 0.6 percent to 3.8 million.
Commerzbank: Economy will only recover slightly in 2025
According to Commerzbank, the prospects for the German economy are only likely to brighten slowly. Germany is facing a “difficult winter half-year in which the gross domestic product is stagnating at best,” said Commerzbank chief economist Jörg Krämer in Frankfurt. However, falling key interest rates would suggest an economic upturn from spring. “In addition, private consumption has bottomed out.”
Krämer forecasts slight growth in the German economy of 0.2 percent for 2025 – after a contraction of 0.2 percent this year. Commerzbank is therefore even more pessimistic than the Council of Experts (“Economy”) and the EU Commission.
Fewer start-ups
In the gloomy economic environment, fewer people are daring to take the step into self-employment. According to the Federal Statistical Office, the number of start-ups fell by 0.9 percent from January to September compared to the same period last year to 456,000. Small businesses in particular saw a decline of over a quarter (minus 25.4 percent). The prospects for founders have worsened with the rise in interest rates and the weakening economy.
According to statistics, the number of business registrations also fell – by 1.0 percent to around 547,500. In addition to new businesses, this also includes business takeovers, conversions and immigration from other registration districts. The total number of business de-registrations, however, rose slightly by 0.7 percent to around 443,000.
Companies are fighting for survival
Currently, almost every fourteenth company sees its existence threatened. 7.3 percent of the companies surveyed expressed this in a survey by the Munich Ifo Institute in October. That is 0.5 percentage points more than a year ago and 2.5 percentage points more than at the beginning of 2023.
The head of the Ifo surveys, Klaus Wohlrabe, emphasized: “The continuous increase in corporate insolvencies is likely to continue.” In addition to a lack of orders, the increasing international competitive pressure is causing problems for many companies. The number of corporate bankruptcies is already significantly higher than in previous years.
According to the survey, the increase in existential concerns is due, among other things, to the manufacturing industry. Concern has also increased significantly in retail.
dpa
Source: Stern
