Overview

• The share of German firms reporting skilled labor shortages fell to 27.2% in Q2 2025, down from 32% in Q4 2024 and nearly 50% in summer 2022.
• Industrial shortages have seen the steepest decline, with only 17.9% of firms affected in Q2 2025 compared to a peak of 44.5% in 2022, though levels remain above the long-term average of 9.8%.
• Service sector shortages are higher, with 32.9% of firms reporting personnel gaps, particularly acute in legal, tax advisory, and transportation sectors.
• Economic weakness, order declines, and hiring freezes, compounded by uncertainty over U.S. policy, have temporarily reduced vacancy pressures.
• KfW Chief Economist Dirk Schumacher emphasizes that the decline is temporary and calls for measures such as increased labor participation, qualified immigration, and productivity improvements to address future shortages.