Never before have so many people been employed in Germany as in 2023. Despite the weak economic situation, an average of almost 46 million people were working.
On average in 2023, around 45.9 million people with a place of work in Germany were employed despite the economic downturn. The Federal Statistical Office announced this today based on preliminary calculations. “That was more than ever since German unification in 1990,” it said.
The old record from 2022 was exceeded by 0.7 percent or 333,000 people – although, according to leading institutes, Europe’s largest economy shrank last year. In 2020, the Corona crisis ended the increase in the number of employed people that had previously lasted over 14 years and led to a decline of 361,000, and things have been looking up again since then.
Immigration and higher Labor force participation as reasons
“One reason for the increase in employment in 2023 was the immigration of foreign workers,” according to the statistics office. In addition, there has been increased labor participation among the domestic population.
“These two growth impulses outweighed the dampening effects of demographic change on the labor market, which will lead to a significant decline in the working-age population in the medium term,” emphasized the statistics office.
Service sector as a job engine
Nine out of ten of the additional employees in 2023 found a job in the service sector. With an increase of 295,000 people or 0.9 percent, the industry reached a total of around 34.6 million employees. The number of employees rose particularly sharply in public service providers, in education and in health professions as well as in trade, transport and the hospitality industry.
The manufacturing industry (excluding construction) recorded a slight increase of 0.3 percent to around 8.1 million employees, while the construction industry saw an increase of 0.6 percent to around 2.6 million. In contrast, there was a decline of 0.4 percent to 555,000 employed people in agriculture, forestry and fishing.
The number of employees was crucial for the overall positive development: it grew by 363,000 or 0.9 percent to 42.1 million in 2023. “For the self-employed, including helping family members, the downward trend that has been going on for twelve years continued in 2023,” it said. Their number fell by 30,000 to 3.9 million (minus 0.8 percent).
“Employment will soon reach its peak”
According to the German Institute for Economic Research (DIW), the number of employed people could break the 46 million mark this year and then rise to 46.082 million in 2025. “We expect that employment will soon reach its peak,” says the current economic forecast from the Kiel Institute for the World Economy (IfW).
According to the experts, the potential workforce will begin to shrink in the not too distant future due to aging and despite probably above-average immigration. “The economic recovery in the next two years should temporarily counteract this somewhat,” explained the IfW.