Employment in Berlin increased by 1.6 percent in 2023: increasing employment despite recession and shortage of skilled workers

Employment in Berlin increased by 1.6 percent in 2023: increasing employment despite recession and shortage of skilled workers

According to a report by www.tagesspiegel.de, Germany slipped into a slight recession last year, which means that the value of all services and goods (GDP = gross domestic product) fell compared to the previous year. In Berlin, the economy is likely to have grown by almost one percent. Official figures are not yet available. However, it is statistically proven that significantly more people were working in the capital in 2023 than in 2022. The number of employed people increased by 1.6 percent and reached an annual average of 2,193,300. That is 35,100 more than in the previous year. Among the federal states, Berlin recorded the second largest percentage increase after Hamburg. Nationwide, employment increased by 0.7 percent.

Lower increase than after the pandemic

The positive economic development in Berlin is remarkable, especially given the slight recession that Germany is in. A possible explanation for the increase in employment despite declining economic indicators is the ongoing shortage of skilled workers. Many companies are hiring new employees to meet urgent needs and prepare for the exit of many baby boomers from the labor market. Furthermore, short-term economic fluctuations do not necessarily lead to layoffs. Another explanation for the growth in the number of employed people and the simultaneous decline in GDP could be that employees work shorter hours on average.

The long-term effects of the recession and the simultaneous increase in the number of employed people in Berlin must continue to be monitored. It is possible that increasing employment will cushion the economic impact of the recession. However, the shorter working hours could also indicate lower productivity, which could have negative long-term effects. It therefore remains to be seen how developments on the labor market in Berlin and nationwide will develop and what impact they will have on the financial sector.