The growth of temporary employment in German industries is being reported by Ifo.
In the German business sector, temporary layoffs have seen a rise lately – and it's predicted to keep climbing: As per the Munich Ifo Institute, 14.3% of businesses experienced this in August, an increase from 12.5% in May. The institute also revealed, based on their business surveys, that a staggering 23% of companies anticipate temporary layoffs in the next three months.
May's forecast for the upcoming quarter was quite subdued. Particularly vulnerable recently have been furniture manufacturers (approximately 29%) and metal production (27.7%). The mechanical engineering and automotive industries also saw over 19% each, while the chemical industry was relatively unaffected.
Although the rise in temporary layoffs, considered in relation to the bleak economic climate of the German industry, is "fairly modest", the researchers clarified. However, this isn't a positive indicator, as many of the impacted companies view the situation as quite grave. "As such, they appear to be reducing headcount or relocating facilities, rather than addressing this with temporary layoffs, despite labor shortages," explained Ifo expert Sebastian Link.
The moderate increase in temporary layoffs might be viewed as "fairly modest" in the broader context, but it's still a cause for concern for affected companies. Besides furniture manufacturers and metal production industries, other sectors like mechanical engineering and automotive have also experienced significant levels of temporary layoffs.
