In the third quarter of 2024, there were 1.28 million vacancies nationwide. Compared to the previous quarter, the number of vacancies fell by 58,100 or around 4 percent. Compared to the third quarter of 2023, the decline is even more pronounced, with a decrease of 446,500 or around 26 percent, according to the IAB Job Survey. The OECD Economic Outlook also gives no cause for optimism.
Overall, this means that vacancies have fallen for the seventh consecutive quarter. “The decline in vacancies on the labor market continues, albeit not quite as sharply as in the previous quarter,” says labor market researcher Alexander Kubis. This is one of the findings of the IAB Job Vacancy Survey, a regular company survey conducted by the Institute for Employment Research (IAB).
In western Germany, 1.03 million vacancies were to be filled in the third quarter of 2024, and around 250,000 in eastern Germany. Nationwide, for every 100 vacancies advertised by companies in the third quarter of 2024, there were around 220 people registered as unemployed – that is 67 more unemployed than a year ago. “There are two reasons for the sharp increase in the job-to-unemployed ratio compared to the same quarter last year,” explains IAB labor market researcher Alexander Kubis. ”On the one hand, the number of vacancies fell by almost 447,000, while on the other hand, the number of unemployed rose by around 180,000.”
81 percent, or 1.04 million, of the vacancies in the third quarter of 2024 were to be filled immediately, i.e. they were already unfilled at that point in time. The vacancy rate, which reflects the ratio of these vacancies to be filled immediately to the total demand for personnel in companies, i.e., to the sum of employees subject to social security contributions and the vacancies to be filled immediately, was 2.9 percent in the third quarter of 2024. “Since the record of 4.5 percent in the fourth quarter of 2022, the vacancy rate has thus fallen noticeably again. Overall, the labor market has cooled significantly compared to the previous year,” said Kubis.
Bleak forecast: the OECD Economic Outlook for Germany
The situation in Germany is not likely to improve. On December 4, the OECD published its Economic Outlook. The prospects for optimism are modest at best.
Selected quotes:
The economy is projected to stagnate in 2024 and grow by 0.7% in 2025 and 1.2% in 2026. Low inflation and rising wages will support real incomes and private consumption. Private investment will gradually pick up, supported by high corporate savings and slowly declining interest rates, but policy uncertainty will continue to weigh on investor confidence. Exports will slowly recover as demand in key trading partners strengthens.
Increasing public spending efficiency, reducing environmentally harmful tax expenditures, and enhancing tax enforcement should be combined with more flexibility in the national fiscal rules to create fiscal space to address a large infrastructure backlog and support green and digital investments. Continuing to reduce the administrative burden, digitalise the public administration and improve infrastructure implementation capacity, particularly at the municipal level, can do much to support a pick-up in public and private investment. Skilled labour shortages can be addressed by strengthening the work incentives of women, older workers and low-income earners, as well as improving education, training and adult learning policies.
