German manufacturers of machinery and equipment are increasingly short of skilled workers, a constraint that adds to the shortages in materials and intermediate goods that they are also suffering, the Ifo economic institute reported recently.
“More and more companies are having to cut back on business because they simply can’t find enough staff,” says Stefan Sauer, a labor market expert at the Ifo Institute. “In the medium and long term, this problem is likely to become more severe.”
The Munich-based Ifo said its survey of some 4,000 companies showed the skills shortage extends beyond trained engineers, mechanics, and IT specialists, with a shortage of low-skilled employees emerging as well.
“Manufacturers of machinery and equipment are feeling the effects of layoffs they carried out before and during the coronavirus pandemic,” said Ifo industry expert Nicolas Bunde. “Now these companies are desperately seeking suitable staff.”
Certain industries worse-affected by lack of staff
The Ifo figures show that certain industries are worse-affected than others. Service providers were hit the hardest, with 54.2 percent reporting a shortage of skilled workers, up from 47.7 percent in April. The hotel and event industries came in above this sector average at around 64 percent. In warehousing and storage, 62.4 percent of establishments were affected.
The manufacturing sector is also badly affected by skilled workers’ shortage, with 44,5 percent of survey participants saying they are suffering from a lack of skilled workers. 41,9 percent of retailers, 39,3 percent of construction companies, and 36,3 percent of wholesale companies also reported shortages.
A total of 41.9 percent of retail businesses reported a shortage of skilled workers, as did 39.3 percent of construction companies and 36.3 percent of wholesalers.
German government looks to reform immigration policies
Industry representatives and economists have long been sounding the alarm about Germany’s dire need for skilled labourers, warning that the shortage risks holding back the economy. A recent study by the KfW found that the proportion of companies that see themselves held back by worker shortages has doubled within the space of a year.
The German government is looking increasingly serious about tackling the country’s crippling shortage of workers, with the traffic light coalition pushing ahead with plans to reform Germany’s immigration policies, to give foreign workers easier and quicker access to the German labour market.
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Muller, M., (2022), “Despite pandemic and Ukraine war, growing demand is worsening the skills shortage”, retrieved 12 September 2022 from KfW Research website https://www.kfw.de/PDF/Download-Center/Konzernthemen/Research/PDF-Dokumente-KfW-ifo-Fachkräftebarometer/KfW-ifo-Fachkraeftebarometer_2022-05_EN.pdf
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