Labour market forecast 2012: The upward trend slows down

Abstract

After a quick recovery from the international recession 2008/2009 the upturn stopped at the end of 2011, mainly due to the European dept crisis. But the decline of the economic activity remained limited and leading indicators already point towards a change for the better. So far, the labour market has been affected only slightly by the weak economy. Employment reached record levels, unemployment declined further. But this trend will not continue with the same level of intensity as the latest labour market forecast from the Institute for Employment Research (IAB) shows.<br> The German economy recovers from the recent recession although growth rates remain only moderate. We expect the gross domestic product (GDP) to grow by 1.1 percent in 2012. The labour market stays robust but is not able to continue the steep upward trend.<br> After the recent rapid growth employment increases more slightly by 450,000 to an average of 41.55 million persons in 2012. Unemployment decreases by 130,000 to 2.84 million persons. Potential workforce rises by 40,000 persons due to higher immigration and labour force participation of elderly people. Working time shrinks by 0.2 percent in 2012 due to fewer working days, hourly productivity increases by 0.3 percent.<br> Further progress in the labour market could lead to a reduction of structural unemployment and at the same time to an upgrade of employment quality. This way the labour market could strengthen its role as a sustainable backup for the domestic purchasing power.

Cite article

Fuchs, J., Hummel, M., Hutter, C., Klinger, S., Spitznagel, E., Weber, E., Zapf, I. & Zika, G. (2012): Arbeitsmarktprognose 2012: Der Aufwärtstrend flacht ab. (IAB-Kurzbericht 03/2012), Nürnberg, 12 p.