ifo employment barometer: “Optimism evaporated”, biggest decline since 2008

Some other voices are somewhat more cautious and optimistic about the job market. The employment barometer published this morning by the Munich-based ifo Institute shows a rather pessimistic view (it is based on 9,000 monthly reports from companies). After all, the current decline is the biggest since 2008, the time of the financial crisis! The employment barometer fell to 98.1 points in February, from 99.6 points in January. According to ifo, the optimism prevailing on the German job market at the beginning of the year has now evaporated. The chart shows the barometer’s development over the past five years. Here are some details in ifo’s wording:

While the service sector was still the positive driver of the barometer in January, they are now rather the ones braking. The indicator fell to its lowest level in half a year. The barometer also pointed downward in the manufacturing sector. Employment numbers continue to decline. In the construction industry, despite a decline of the barometer, employees are still being hired. In the retail sector, as in the previous months, there is little movement in employment.

Das Beschäftigungsbarometer des ifo-Instituts

Industrial recession

The following detailed graphics show it quite clearly. The industrial recession has also been in full swing on the job market for some time now. Services and construction are now also moving downwards. Only trade still looks positive.

ifo Beschäftigungsbarometer im Detail

Here is ifo’s explanation of how this employment barometer is generated:

The ifo Employment Barometer is based on approximately 9,000 monthly reports from companies in the manufacturing, construction, wholesale and retail trade and the service sector. The companies are asked to report their employment plans for the next three months. They can mark their plans for the number of employees for the next three months as “increasing”, “remaining the same” or “decreasing”. The balance of the plans is the difference between the percentages of “increase” and “decrease” answers. To calculate the index values, the balances are each scaled to the average for 2015.

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