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Cessation of Short-Time Work Uptick in German Industries

Ifo survey findings

End of the increase in short-time working in German industry
End of the increase in short-time working in German industry

Cessation of Short-Time Work Uptick in German Industries

Munich-based Ifo Institute anticipates a halt in the growth of short-time work amongst German industrial companies. In its most recent report, 12.5% of the surveyed businesses indicated short-time work, marking an increase from 10.6% in February, 9.6% in November, and 6.7% in August. However, company forecasts for future instances of short-time work have decreased.

At present, 18.8% of industrial firms are preparing for potential short-time work - down by 0.8 points compared to three months prior. It's noteworthy that this figure is higher than the 12.5% reported in May, but Ifo expert, Sebastian Link, notes that this doesn't necessarily signal further acceleration. Typically, companies anticipate a higher level of short-time work than actually occurs. Consequently, a more significant focus should be placed on whether these expectations are rising or falling. The trend at present suggests no further worsening - although there's no evidence of a significant reversal.

This matches a broader picture of change in various sectors of the economy. The increasing number of reported cases of short-time work is one more indication that the recent economic downturn may have reached its pinnacle.

Presently, the level of short-time work in Germany's industry is substantial; nevertheless, it is far from the historic peaks witnessed during the Coronavirus pandemic.

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Despite the Ifo survey showing a rise in the usage of short-time work among German industrial companies, the anticipated instances for future use have decreased. As the level of short-time work in the industry is substantial, it hasn't reached the historic peaks seen during the Coronavirus pandemic, indicating an end or at least a slowing down of the rapid increase.

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