Record year 2023: Why employment figures in Germany have risen so sharply despite weak economic performance

Record year 2023: Why employment figures in Germany have risen so sharply despite weak economic performance

According to a report by www.tagesschau.de,

Never before have so many people been employed in Germany in 2023. Despite the weak economic situation, almost 46 million people were in work, exceeding the previous record since German unification in 1990. An increase of 0.7 percent or 333,000 people compared to 2022 was recorded despite the economy contracting. The increasing employment is due to the immigration of foreign workers and an increased labor force participation of the domestic population. The dampening effects of demographic change on the labor market were compensated for by these growth impulses.

Nine out of ten of the additional employees in 2023 found jobs in the service sector. The service sector was therefore the job driver and recorded an increase of 295,000 people. The manufacturing sector (excluding construction) also recorded a slight increase. The number of employees grew by 363,000, while the number of self-employed people, including helping family members, fell by 30,000.

The German Institute for Economic Research (DIW) predicts that the number of employed people will increase in the coming years and may soon reach its peak, as the potential workforce will shrink due to aging.

These figures show that despite a weak economic situation, the number of employed people in Germany was at a historic high in 2023. This increase has positive effects on the labor market and the financial sector as it can increase purchasing power and consumption and thus support economic growth. The predicted peak of employment in the coming years will potentially lead to a decline in the potential workforce, which may pose challenges for the economy. It is important to monitor these developments and take appropriate measures to ensure the long-term stability of the labor market.