In May, German unemployment remained flat in seasonally adjusted figures at 2.87 million, the Federal Labour Agency (BA) in Nuremberg said today. While the adjusted jobless rate declined to 6.7%, a twenty-year low, indications are that the labour market is starting to slow down.

“The German labour market has overall developed positively in May. Especially the employability rate shows a plus. But the good underlying trend is starting to weaken,” said chairman of the labour agency, Frank-J. Weise at a press conference today.

Commerzbank economist Eckart Tuchtfeld agrees. “Recent developments tell us that while the job market is still intact, things have begun to move forward very slowly,” he said. “I wouldn't rule out a setback in the months to come.”

The BA also published an index on the demand for labour in the month of May which shows that temporary employment remains a popular employment option.

“Temporary staffing continues to show much demand, around one in three posts have been reported from this field,” the agency said.

Wholesale and retail, construction, catering as well as health care and social services show a particular high demand for labour. Almost all sectors report increased demand for staff but the BA warned that this level of demand is starting to decrease. 

This comes after a recent Manpower survey which showed that at least two in five employers in Germany are struggling to fill vacancies in Germany, which is experiencing an acute skills shortage.