The labour market has developed considerably better than expected during the
past year, and employment looks set to rise further in 2018. In fact, the German
labour market was in an excellent condition in 2017. Employment trended
upwards and reached ever new peaks; recently, 44.5 million people were
gainfully employed. Overall, employment was up 1.5% yoy. At the same time,
the unemployment rate declined steadily, to recently 5.6%. At 5.7%, the average
for the year looks set to be considerably below the consensus forecast
published at the beginning of the year (6.1%).
Much of the rise in employment stems from labour migration, which is possible
thanks to the EU principle of the free movement of workers. Part of the rising
demand for labour was covered by workers from the eastern European EU
countries, from Greece, Spain, Italy, Portugal and the Balkans. As most labour
migrants were well qualified, they were quickly integrated into the labour market.
As the economy recovers, particularly in the southern EMU member states,
labour migration looks set to slow in the coming year. This means that the
imminent lack of qualified labour, which is already visible in some regions, will
probably intensify in the coming year. According to several surveys, many
companies regard the lack of well-qualified workers as one of the main
obstacles for their business.