The outlook for Germany’s labour market improved slightly in May, two closely watched indicators showed on Wednesday, although the overall picture remains subdued amid weak economic growth.
The employment barometer compiled by Munich-based ifo Institute rose by 2.5 points to 93.9 in May.
“Overall, however, more companies still want to cut jobs than create them,” said Timo Wollmershäuser, head of forecasts at ifo. “Due to the weak economic development, companies remain cautious in their personnel planning.”
In April, the index, which reflects companies’ hiring intentions, had fallen to its lowest level since 2020.
The labour market barometer published by the Institute for Employment Research (IAB) in Nuremberg also rose for the first time in six months. However, the increase was modest, edging up by just 0.1 points and continuing to signal a rather pessimistic outlook.
For its indicator, the IAB surveys all German employment agencies on their expectations for the coming three months.
Looking at individual sectors, ifo said conditions remain particularly negative in manufacturing and retail.
In construction, by contrast, there is only a minimal tendency toward job cuts, while the services sector moved slightly into positive territory in May, with more companies planning to hire than reduce staff.