Will the upswing in Germany also bring more jobs?

The automotive industry is the problem child on the German labor market. Manufacturers and suppliers are putting the red pencil on. Thousands of jobs are to be lost at Bosch, ZF, Schaeffler and Continental. The big manufacturers are also restructuring their companies. Volkswagen, for example, wants to cut 50,000 jobs in the coming years - in addition to savings plans that have already been decided.

The transformation of the industry has already left its mark. According to the Federal Statistical Office, fewer people are working in the German auto industry than at any time since 2005. The challenges are symptomatic. In competition with other, cheaper production locations, Germany as an industrial location can sometimes no longer keep up. Competition from China in particular is causing problems for companies.

AI causes uncertainty

Jutta Rump, an expert from the Institute for Employment and Employability in Ludwigshafen, speaks of a complex situation: "We have a lot of pressure on business models, some of which are being significantly redefined." Rump sees a technological revolution around the topics of digitalization and artificial intelligence.

The companies are not sure which qualifications and skills will still be necessary in the future: "And they are just trying to feel their way around," said the labor market expert in an interview with the ARD financial editorial team. However, the uncertainty means that companies are currently holding back on hiring new employees.

Economic activity could stimulate the labor market

The economic situation has also put a strain on companies and thus on the labor market. In recent years, the German economy has been under pressure and has struggled against recession. The labor market has been losing momentum for months. In September the unemployment rate was 6.4 percent, slightly higher than a year ago.

However, economists expect that the economy will now gain some momentum again. Both the federal government and the International Monetary Fund have recently revised their forecasts for Germany upwards. They assume that gross domestic product will grow by 1.3 percent this year - the fastest it has been since 2005. Jörg Krämer, chief economist at Commerzbank, expects that the stronger economy will slowly have an impact on the labor market: "The phase of declining employment should now come to an end," said Krämer.

The situation in the industry remains tense

However, the economic upswing does not mean that struggling companies - for example in the automotive industry or mechanical engineering - will stop or limit their planned job cuts. Economist Jörg Krämer sees other reasons for an upturn in the labor market. "There is a sector that is booming very strongly. That is the state or government-related things, such as geriatric care or health care. And that is currently making up for it." But that is not a positive development for the economy. If the state expands, says Krämer, it weakens productivity and innovative power.

This means that not only the current economic upswing, but also an upcoming recovery in the labor market is likely to be largely due to the federal government's investment programs. The industry's problems remain - and with them the concerns of many employees about their own jobs.