Germany’s shrinking industrial sector is increasingly reflected in employment figures
Germany’s shrinking industrial sector is increasingly reflected in employment figures, say leading audit, tax and business advisory firm, Blick Rothenberg.
Nils Schmidt-Soltau, a partner at the firm, said: “New data published by Germany’s Federal Statistical Office shows that employment fell by 171,000 people, or 0.4%, year-on-year in May 2026, and has been declining on a year-on-year basis since August 2025. Employment pressures are increasingly concentrated in manufacturing and industrial supply chains.”
He added: “Germany’s shrinking industrial workforce reflects the pressures facing parts of the country’s manufacturing sector. The latest employment data suggest Germany faces the dual challenge of industrial restructuring and persistent skills shortages in key sectors. It has been released against a backdrop of planned workforce reductions being announced at major industrial groups including Volkswagen, Bosch, ZF and Thyssenkrupp.”
Nils said: “The issue is not simply one of rising unemployment, but of managing profound changes within the country’s industrial economy while continuing to address long-term shortages of skilled workers.”
He added: “The contrast with the UK is notable. While the UK labour market faces its own challenges, it has not experienced the same degree of industrial restructuring currently being seen across parts of German manufacturing. The UK’s larger service sector may also leave it better placed to absorb economic headwinds than Germany’s more manufacturing-focused economy.”
Nils said: “Germany’s manufacturing sector has long been a cornerstone of the country’s economic success, but it is now facing significant pressure from global competition, higher costs and technological change. Germany remains one of the UK’s most important trading partners, making developments in its labour market relevant to many UK businesses.”