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Annual review 2019 - Robust labour market development despite weak economy

“The labour market continued to prove its robustness in 2019. Despite the weaker economy, unemployment and underemployment decreased on average in 2019, and employment has risen again”, said the Chairman of the Federal Employment Agency (BA), Detlef Scheele, at today’s monthly press conference in Nuremberg.
03 Jan 2020 | Press Release No. 2

Unemployment rate in 2019:                   2,267,000
Unemployment compared to last year:   -73,000
Unemployment compared to last year:   -0.2 percentage points – now 5.0%

Unemployment and underemployment

The annual average unemployment and underemployment decreased again thanks to the positive development of the labour market until the first quarter of 2019. As the year progressed, further positive development was prevented by the weaker economy and a special effect caused by the monitoring of unemployment status.

In 2019, an average of 2,267,000 people were registered as unemployed in Germany – 73,000 fewer than in the previous year.

In 2019, an average of 3,200,000 people were underemployed, which also includes those involved in labour market initiatives and those who are unable to work in the short term. This figure is 85,000 less than in the previous year.

Short-term employment and employment subject to national insurance payments

There was a further increase in short-term employment and employment subject to national insurance payments in 2019, but not as strong as in previous years. There was a particular loss of momentum in cyclical sectors, while non-cyclical branches of the economy continue to record significant growth. Factors like sectoral change, high labour market tension and immigration have become more important, and so there continues to be a rise in both short-term employment and employment subject to national insurance payments despite the weak economy. According to the preliminary data provided by the Federal Statistical Office, short-term employment grew by an average of 402,000 to 45.26 million throughout the year.

As in previous years, employment subject to national insurance payments increased more than short-term employment in 2019. 33.41 million people were in employment subject to national insurance payments in June 2019 – 705,000 more than in the previous year. Other forms of employment (e.g. minor employment and self-employment) continued to decline.

Labour demand

The average amount of registered jobs was 774,000 in 2019 – 22,000 fewer than in the previous year. In 2019, most of the job offers were aimed at workers in the fields of sales, transport and logistics, energy and electrical engineering, healthcare, metalwork, mechanical engineering and automotive technology.

The BA job index (BA-X) – an indicator of the labour demand in Germany that also considers seasonal factors – continued to decline throughout 2019. It stood at 223 points in December – 31 points below the previous year’s figure. In a long-term comparison, however, the labour demand is still high.

Despite the increasing difficulties in filling positions, there is still no general shortage of skilled workers. Nevertheless, there are shortages in technical fields, construction, healthcare and nursing.

Cash benefits

An average of 750,000 people received unemployment benefits in 2019 – 35,000 more than in 2018.

According to the extrapolated figures of the BA, around 3,896,000 persons were fit to work and eligible to receive benefits in 2019 – 245,000 lower than in the previous year. A large amount of those who receive unemployment benefits (Arbeitslosengeld II) are not registered as unemployed. This is because they are working, looking after small children, caring for relatives or still in education. An average of 1,440,000 people were registered as unemployed (German Social Security Code II) in 2019.