The economic downturn has reached the German labor market. According to a forecast, the number of unemployed is likely to increase nationwide – although with clear differences between the states.
According to a forecast by the Institute for Labor Market and Occupational Research (IAB), the number of unemployed will continue to increase in all federal states over the course of the year. At the same time, the number of employees subject to social security contributions is likely to only increase slightly. In some countries, a decline in the number of employees is even possible, according to the study published today.
“The weak economy this year is leading to a stronger relative increase in unemployment in the area covered by the Social Security Code III, where people who have recently lost their jobs and have good chances of being reemployed are predominantly found,” explains Anja Rossen, research assistant at the IAB . “Unemployment in this area is more sensitive to economic fluctuations.”
Strongest increase expected in the southwest
According to the analysis, unemployment is increasing the most in Baden-Württemberg at 6.6 percent. This is followed by Hamburg with 6.1 percent and Bavaria with 5.8 percent. The lowest increases are expected for Lower Saxony and North Rhine-Westphalia at 2.9 percent and 3.0 percent respectively.
According to the researchers, despite the increase, the unemployment rate in the south and southwest will still be the lowest in Germany. They assume rates of 3.5 percent in Bavaria and 4.1 percent in Baden-Württemberg.
According to the regional forecast, employment subject to social security contributions is only likely to increase slightly at 0.7 percent – in western Germany by 0.8 percent and in eastern Germany by 0.3 percent. According to the forecast, this will probably increase the most in Hamburg (plus 1.5 percent), in Berlin (1.2 percent) and in Bavaria (1 percent). Experts expect the largest declines in Thuringia and Mecklenburg-Western Pomerania (minus 0.4 and minus 0.3 percent).
unemployment already increased in March
The unemployment rate in March already indicates that the labor market is affected by the current economic weakness. With the spring recovery on the labor market, unemployment fell by 45,000 to 2,769,000 people. However, the decline this year was small. Compared to the previous month, the number of unemployed nationwide actually increased, seasonally adjusted.
“Unemployment and underemployment are decreasing in March, but less than usual this month,” emphasized Andrea Nahles, CEO of the Federal Employment Agency (BA). “The economic downturn is still having an impact on the labor market. Overall, however, it is still holding up relatively well.”
The federal state with the highest unemployment in March was Bremen. The unemployment rate there was eleven percent, well above the rate in the other federal states. The unemployment rate in Germany was six percent.