KfW Research: Skilled labour shortages continue to fall

• Almost 26 per cent of companies in Germany report constraints due to lack of workers – down from just under 32 per cent a year ago
• For many businesses, filling vacancies continues to take a long time
• Skills shortages have grown in the main construction industry, bucking the trend in other sectors

Businesses in Germany are complaining less often about a shortage of skilled workers. In October, 25.8 per cent of enterprises reported that their business activity was being constrained by a lack of workers. In the fourth quarter of 2024, that figure was still 31.9 per cent, and in the summer of 2022 as high as 49.7 per cent. The reason for the drop, however, is a rather unwelcome one: the continuing weak economy. That is also why the decline has been most significant in the industrial sector, which has recorded the steepest declines in production and sales. The most recent figure shows that 17.1 per cent of businesses were affected.

These are the findings of the KfW-ifo Skilled Labour Barometer, which is based on evaluations of the ifo economic surveys. Around 9,000 enterprises, among them 7500 SMEs, are polled for the analysis once every quarter.

Services industries continue to complain about a severe shortage of workers. Of the businesses operating in this segment, 30.2 per cent reported difficulties finding staff. But here, too, the rate has recently fallen. In the catering segment, for example, the share of affected businesses still stood at 40 per cent in April, and that has now fallen to 26.7 per cent.

Unlike the general trend, the skills shortage in the main construction industry has recently grown. The share of businesses reporting production disruptions was 31.6 per cent, after 27.3 per cent in April. This indicates that construction activity increased again in the second half of the year.

The current decline in the skilled labour shortage in most economic segments, however, cannot conceal the fact that the fundamental problem remains. Many businesses are still searching for workers, not least as a result of demographic change. This is also demonstrated by the length of vacancy durations, which reached a new record high in October. On average, it took 161 days for a business to de-register a job vacancy at the Federal Employment Agency. By way of comparison: In October 2010 it took only 56 days.

“We expect the German economy to gather steam next year. Skilled labour shortages will then worsen again as well. That is why increasing labour force participation in Germany and enabling skilled migration must remain an important policy objective,”

said Dr Dirk Schumacher, Chief Economist of KfW.

The KfW-ifo Skilled Labour Barometer is published twice a year in early summer and in autumn. The current edition is available at:

KfW-ifo Skilled Labour Barometer | KfW