Companies discuss job creation instead of hiring
German economy surprisingly shrinks in the second quarter. The development also impacts the labor market. In a survey by the Ifo Institute, few companies are willing to hire new employees.
The willingness of German companies to hire new employees has decreased in July, according to a survey by the Ifo Institute. The employment barometer fell to 95.4 points in July, down from 95.9 points in June. The stagnating economic development is the reason for this, said Klaus Wohlrabe, head of the survey. "Where orders are lacking, no additional personnel is needed."
The survey was conducted among thousands of companies. The July value is the lowest since February.
In the industry, the Ifo barometer remained unchanged. "Many companies are discussing a reduction in jobs," it said. The same applies to retail, where cautious consumers are putting pressure on business. In the construction industry, the number of employees will remain constant despite the ongoing crisis. Only service providers are still hiring new employees, but fewer than in the previous month.
Neighbors outperform Germany
Europe's largest economy has surprisingly shrunk in the second quarter. Germany's gross domestic product fell by 0.1 percent compared to the first quarter, when it had grown by 0.2 percent. Declining investments in equipment such as machines and buildings contributed to the poor performance.
Among the largest states in the currency area, Germany is at the bottom: Italy, long considered chronically weak in growth, managed to achieve a plus of 0.2 percent. France achieved a growth of 0.3 percent in the spring, Spain even 0.8 percent. The Organisation for Economic Co-operation and Development (OECD) expects a growth of only 0.2 percent for the whole year. This means that no other major industrial nation is likely to perform as poorly this year.
Despite the poor economic performance, the concept of an information society continues to advance in Germany. Many businesses are leveraging digital technologies to streamline operations and enhance customer experiences.
The shrinking economy in Germany has led to a trend in some industries, with companies focusing on cost-cutting measures instead of expanding their workforce. However, the information society's growth remains an ongoing development in the country.
