KfW Research: Fewer businesses are reporting skilled labour shortages

• Thirty-two per cent of enterprises in Germany are complaining about a lack of workers
• Steep drop in demand for labour in industry has reduced skills shortages there
• Services sector remains particularly hard-hit

At the start of the fourth quarter, skills shortages were hampering operations at nearly 32% of businesses in Germany. Skilled workers shortages have thus eased further as a result of the weak economic environment. In early April, 35% of enterprises were complaining about a shortage of workers. The peak was reached in autumn of 2022, when 45.7% of enterprises reported that skills shortages were hampering their operations.

The drop is most significant in industry, which has recorded the steepest declines in sales and orders. But here, too, 21% of businesses recently reported disruptions due to skills shortages. The number of affected industrial enterprises continues to be twice as high as the long-term average. On average across all quarters since 1991, a mere 9.7% of manufacturing enterprises reported having been impacted by skilled labour shortfalls.

In some sectors such as wholesale and the main construction industry, skilled labour shortages have worsened again slightly despite the economic slowdown.

These are the findings of the KfW-ifo Skilled Labour Barometer, which is based on evaluations of the Ifo economic surveys. The Skilled Labour Barometer analyses the share of enterprises in Germany that report adverse impacts on business operations from a shortage of skilled workers. Around 9,000 enterprises, among them 7500 SMEs, are polled once every quarter. The latest survey was conducted in early October.

Skills shortages are particularly pronounced in the services sector, with 39.1% of businesses reporting shortfalls. Approx. 73.6% of law firms, tax consultancies and auditing firms are currently affected, more than 50% of road and rail transport services – bus companies, for example – and nearly 50% of accommodation providers.

Overall, small and medium-sized enterprises are affected at roughly the same rate (32.1%) as large enterprises (31.5%).

“Skilled labour shortages continue to act as a brake on growth for a substantial share of businesses. The drop in the number of affected enterprises is therefore no reason to sound the all-clear. Skills shortages will worsen again in the coming years as the economic situation improves and baby boomers begin to reach the age of retirement”,

said Martin Müller, labour market expert at KfW Research.

“How this will impact on the economy depends on how successful the response will be. All the stops need to be pulled out in order to address the shortage. We need to further expand labour market participation, increase skilled migration and raise the labour productivity growth rate. To this end, we need more investment in physical assets and human capital, and we need to strengthen the innovative capacity of the economy.”

The KfW-ifo Skilled Labour Barometer is published twice a year in early summer and in autumn. The current edition is available at:

KfW-ifo Skilled Labour Barometer | KfW