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Annual Review 2017

Very Good Development of the Labour Market
03 Jan 2018 | Press Release No. 2

"The labour market developed very well in 2017: the number of unemployed people fell, for the fourth year in a row, on average for the year; employment subject to social security contributions rose sharply and the demand by companies for new employees increased again, year-on-year. The labour market has benefited, not the least, from a broad-based economic upturn," said the CEO of the Federal Employment Agency (BA), Mr. Detlef Scheele, today, at the monthly press conference in Nuremberg.

Unemployment in 2017:
2,533,000
Unemployment year-on-year comparison:
- 158,000
Unemployment rate compared to previous year:
- 0.4 percentage points to 5.7 percent

Unemployment and Underemployment

In 2017, 2,533,000 people were registered as unemployed in Germany on an annual average. This reduced the number by 158,000 compared to the previous year. Underemployment, which also includes persons in measures of labour market policy and short-term incapacity to work, amounted in 2017 to an average of 3,517,000 persons. That was 60,000 less than in the previous year. The fact that unemployment has declined stronger than underemployment on an annual average is explained by the increased relief provided by labour market policy instruments, especially for refugees. Correspondingly, measures of so-called external funding, especially, the participation in integration courses at the Federal Office for Migration and Refugees (BAMF), registered a strong growth.

Gainful Employment and Employment Subject to Social Security Insurance Contributions

Employment and employment subject to social security insurance continued to increase in 2017. According to provisional data from the Federal Statistical Office, employment increased on average for the year by 638,000 to 44.27 million. Employment reached its highest level since reunification. In the year of 2017, as in previous years, employment subject to social security insurance increased stronger than gainful employment. The other forms of gainful employment, e.g. employment of minors or self-employment, continued to decline. In June 2017, 32.17 million workers were employed in a form of employment subject to social security Insurance contributions. That was 722,000 more than a year earlier. The economy only partly explains the strong rise in employment. Other factors such as sectoral change, high labour market tensions and immigration grew in importance for employment and led to a stable upward trend.

Labour Demand

The number of registered jobs in 2017 was 731,000, on average, for the year. That was 75,000 more than last year. In 2017, most jobs were offered to recruit employees in the transport and logistics, sales, metalworking, mechanical and automotive engineering, energy and electrical engineering, and healthcare sectors.

The BA-X, a seasonally adjusted indicator of labour demand in Germany, was characterized by almost continuous growth in 2017, and it reached its highest level of 256 points at the end of the year. The value from the previous year value was exceeded by 31 points.

Despite the increased demand for labour, a nationwide shortage of skilled workers still does not exist. At the same time, there are general tensions and bottlenecks in individual technical professions, in construction professions and in some healthcare and nursing professions.

Payments of Unemployment Benefits

A total of 745,000 persons received unemployment benefits, on average, in 2017, 42,000 fewer than in 2016.

According to projected values in 2017, the number of persons eligible to work within the framework of SGB II (Sozialgesetzbuch II / German Social Code II) amounted to approximately 4,365,000. After a decline during recent years, their number has slightly increased again. The increase is mainly due to nationals of the eight main countries of origin of those seeking protection. In 2017, an average of 1,677,000 people (66 % of all unemployed) were registered as unemployed within the framework of the SGB II. A large group of the Unemployment Benefit II beneficiaries is not registered as unemployed. This is due to some of these people being gainfully employed, raising small children, caring for relatives, or still being enrolled in educational programmes.