Increase in Short-Time Work Halted in German Manufacturing

German manufacturing companies responded to the economic slowdown in winter with significantly more short-time work. Although it is likely to remain high in the coming months, it is not expected to worsen any further. In the second quarter, 18.8% of manufacturing companies responded that they were planning to introduce short-time work in the next three months.

In the first quarter of 2024, the figure still stood at 19.6%, in the fourth quarter of 2023 it was 19.1%, and in the previous quarter it was 13.8%. However, the actual figure is always a few points lower. According to the ifo survey, 12.5% of manufacturing companies are currently using short-time work.

Companies in basic metals manufacturing (42.9%, down from 44.6%) make the most frequent use of this instrument in their planning, followed by manufacturers of metal products (30.8%, up from 27.2%). The figure for electrical equipment manufacturers is 28.3%, down from 34.6%, and 23.7% for mechanical engineering, up from 21.2%. In the automotive sector, the planned figure fell from 17.3 to 16.1% of the companies. The small sector of furniture manufacturers stands at 46.7%, down from 52.9%.

According to the German Federal Employment Agency, short-time work due to economic factors increased sharply by 44% in the winter half-year. That is an increase of 152,000 people in September 2023 to 219,000 in March 2024. More than 80% of short-time workers are employed in manufacturing. Compared to the long-term average, it is thus at a higher level, but is still a long way from the record levels during the coronavirus pandemic.