German Labor Shortage Eases Slightly Due to Economic Slowdown

A new Ifo Institute survey reveals a decline in unfilled skilled labor positions, though demographic trends signal long-term challenges.

The percentage of German companies reporting a shortage of skilled workers dropped to 28.3% in February 2025, down from 31.9% in October 2024, according to the Ifo Institute.
The decline is attributed to reduced demand for labor driven by a weak economic environment.
Sectors like legal and tax consulting, auditing, and staffing firms remain heavily impacted, with up to 75% of companies struggling to find qualified personnel.
Demographic shifts, including the retirement of the Baby Boomer generation, are expected to exacerbate the labor shortage in the coming years, with up to 15 million workers leaving the market by the mid-2030s.
Industries such as hospitality and manufacturing report varied levels of labor shortages, with 42% of hospitality firms and 18% of manufacturers facing challenges.