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Germany — Nightmare scenario of 4 million unemployed now unlikely

06 January 2010
 

Following the better than expected unemployment figures published yesterday, most economic research institutes now believe that the dreaded threshold of 4 million unemployed will not be reached in Germany.

Volker Treier, Chief Economist at the Federation of German Chambers of Commerce (DIHK) told Berliner Zeitung "companies still have negative staffing plans but these have improved noticeably over the last few months. This gives us hope that in the second half of 2010 job losses and new recruitment will start to even each other out again."

Treier assumes that companies will keep most of their permanent staff on in spite of the economic crisis in order to be able to cope with increased demand later on. He said "once world markets start to pick up again German companies should be amongst the first to benefit."

Temporary employment agencies have already experienced stronger demand in the German marketplace. Ludger Hinsen, President of the Temporary Employment Association (BZA) pointed out that employers deal with initial signs of an upward trend by employing temporary staff because they don't yet have faith that the first green shoots are an actual trend. Hinsen said "temporary employment could therefore contribute to the fact that unemployment will not rise that much further this year."

 

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