Over hundred thousand temporary jobs could be lost because of new pay rates coming into force this week in the metal/electrical and chemical sectors, according to Germany’s head of ManpowerGroup.

Vera Calasan told the newspaper Wirtschaftswoche that such a severe job loss is “realistic”. The managing director of Germany’s fourth-largest staffing company also said: “In a worst case scenario we are expecting a 20% drop in revenue.”

She said that some contracts had not been extended because of higher surcharges for temporary workers, following landmark equal pay agreements in the staffing industry earlier this year. A weaker economic outlook has also impacted business – this month the German government slashed its 2013 growth forecast from 1.6% to 1.0%.

The latest data from August shows that there were around 870,000 agency workers in with figures having fallen from a record high last year by nearly -5%.

Experts have warned that the collective agreements could lead to temporary jobs being moved to “low wage” countries in Eastern Europe. The Confederation of German Employers' Associations recently said that low-skilled jobs are particularly endangered.