The share of German manufacturers planning to launch short-time work programs, known as Kurzarbeit, over the next three months hit its highest level since the start of 2013, a survey by the ifo Institute showed on Thursday.
The survey found that 8.5 percent of manufacturers expect to introduce short-time work in the next three months versus 2.6 percent in the same period last year.
According to the ifo survey, 3.8 percent of manufacturers have already introduced short-time work programs, which is the highest value since mid-2013.
The figure has risen almost steady from only 0.4 percent, its last low at the end of 2017, the survey found.
“The economic slowdown is gradually having an effect on the labor market,” Timo Wollmershaeuser, head of ifo Economic Forecasts said.
“German industry has been in recession since the middle of last year. Short-time work is the method of choice when companies want to retain their skilled workers despite difficult economic times.”
Mirroring a slowing economy, German unemployment barely decreased in June after a strong increase in May, which was the first increase in nearly two years.
The number of unemployed persons fell by 1,000, preliminary data from the Federal Employment Agency showed at the start of the week.
The jobless rate was 5 percent in June, unchanged from May, when it had risen from the re-unification low of 4.9 percent logged in each of the previous two months to mark the first increase since November 2013.
Underemployment also grew in June and the number of vacancies remained high, but slowed noticeably.
Citing the initial projections from Germany’s Federal Employment Agency, ifo said short-time work programs are set to expand to cover almost 44,000 people in April, due to the tough economic situation, versus just 13,000 workers last year.
The agency is currently assuming a decline in the number of short-time workers between May and July, the think tank noted.
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