Overview

• The IAB projects overall stagnation next year, with unemployment decreasing 0.4% in West Germany and rising 1.0% in the East, and it sees no broad trend reversal.
• State outlooks show the sharpest increases in Berlin (+2.0%), Saxony (+1.5%) and Brandenburg (+1.2%), while declines are expected in Hesse (-1.9%), North Rhine-Westphalia (-1.3%) and Saarland (-0.8%).
• Bavaria is forecast to post the lowest unemployment rate at 4.0%, with the highest rates persisting in Bremen (11.7%) and Berlin (10.4%), and about half of states seeing no change in their rates.
• Employment subject to social insurance is expected to edge up 0.2% in the West and slip 0.1% in the East, led by gains in Hamburg (+0.9%) and Brandenburg (+0.5%) and declines in Thuringia (-0.9%) and Saxony (-0.3%).
• Baden-Württemberg is seen holding a 4.5% unemployment rate in 2026 with a 0.1% uptick in social-insurance jobs, as officials cite weak growth, trade-policy uncertainty and demographic skill shortages and call for support for career changers and more training.