In Germany, the number of employed persons declined significantly in the first quarter of 2026. From January to March, approximately 45.6 million people were employed—486,000 fewer than in the previous quarter. This decline is more pronounced than in many previous years, even though the beginning of the year typically tends to be weaker. On a seasonally adjusted basis, this amounts to a net loss of 61,000 jobs. The manufacturing and construction sectors, in particular, are shedding jobs, while high costs, weak demand, international crises, and competition from China place additional strain on the labor market. (bild: 19.05.26)
Industry and Construction Shed a Particularly High Number of Jobs
The industrial sector reports a significant decline in employment. In the manufacturing sector—excluding construction—171,000 jobs were lost compared to the same period last year. This downturn thus impacts a sector that remains central to value creation and exports.
The construction sector, too, continues to lose momentum. Employment in this sector fell by 27,000 people. At the same time, high financing costs, expensive materials, and weak order books are putting the brakes on many companies.
Third Consecutive Quarter of Job Losses
This decline is no mere blip. Employment has now been shrinking for the third consecutive quarter. Consequently, the risks to incomes, consumer spending, and investment are intensifying.
Germany fares poorly in a European comparison. While Germany is shedding jobs, employment in the Eurozone is growing by 0.5 percent. Across the entire EU, the increase was even higher, at 0.6 percent.
Service Providers Can Barely Offset the Losses
The service sector is showing only weak growth. Compared to the same period last year, the sector added 45,000 jobs. However, this increase is insufficient to offset the losses in the industrial and construction sectors.
New jobs are being created primarily in the public and quasi-public sectors. Public services, education, and healthcare collectively added 181,000 jobs. Conversely, the trade, transport, and hospitality sectors lost 81,000 jobs, while business services shed 72,000 positions.
Labor Market Sends a Clear Warning Signal
The number of employees fell by 120,000 compared to the same period last year, dropping to 42.0 million. Furthermore, the number of self-employed individuals declined by 37,000 to 3.6 million. Consequently, this weakness is impacting large enterprises, smaller firms, and the self-employed simultaneously.
The Federal Government does not anticipate a robust recovery in the short term. The Ministry of Economic Affairs’ monthly report states: “The customary spring upturn in the labor market is largely absent this year.” As a result, the labor market remains a key risk for the economy, Germany as a business location, and private households.