1. The current and future development on the German labour market Annual Meeting of the International Labour Market Forecasting Network Helsinki, May 9-10, 2011 Sabine Klinger

2. 2  Remember Eugen Spitznagel´s report and last meeting:  sharp decline of real GDP during the crisis  but: moderate labour market response in some countries, especially Germany  flexible working time  quick recovery not only of the economy – but of the labour market as well  Was the economy just overshooting?  By now we may suggest:  typical business cycle patterns were interrupted  recovery might be sustainable, turned into a „normal“ upswing 1. Introduction

3. 3 Source: ifo Institute for Economic Research. Leading indicators: ifo business climate 2. Current situation of the German economy

4. 4 Source: Destatis. Leading indicators: inflow of orders 2. Current situation of the German economy

5. 5 Source: Destatis. Real GDP (growth and index) 2. Current situation of the German economy

6. 6 3. The development on the German labour market Source: Federal Employment Agency. Leading indicators: inflow of non-unemployed people looking for a job

7. 7 3. The development on the German labour market Source: ifo Institute für Economic Research. Leading indicators: ifo employment barometer

8. 8 3. The development on the German labour market Source: Deutsche Bundesbank. Indicators: Labour costs

9. 9 3. The development on the German labour market Source: Federal Employment Agency, 2011: IAB Forecast. Employment covered by social security

10. 10  On the structure of the German labour market (rather trend than cycle)  Total Employment + 0.9 percent  40.84 million  employment covered by social security rises more quickly  self-employment, marginal employment stagnate or shrink  Sectoral development  highest employment growth: Business services, construction  other services: +health services, - public services  almost jobless growth: Manufacturing  Increase in less stable kinds of employment  temporary agency work (1/3 of employment growth)  fixed-term contracts (1/2 of new hirings)  Part-time and full-time employment rising  working time per employed person: 1.428 hours in 2011  volume of work: above pre-crisis level 3. The development on the German labour market

11. 11 3. The development on the German labour market Source: Federal Employment Agency, 2011: IAB Forecast. Unemployment, registered at the employment agencies

12. 12 Source: Federal Employment Agency, Destatis, 2011: IAB Forecast. Labour force potential 4. Labour supply and labour shortage

13. 13 Source: German Job Vacancy Survey. Some indicators on labour shortage: similar to pre-crisis situation in percent: 4. Labour supply and labour shortage

14. 14  Economic development faces high risks again.  Indebtedness of EMU member states  Inflation (German CPI currently at 2.4 percent)  Oil, raw material, energy  demand-driven price increases  high risk to turn into a supply-driven shortage due to political disturbances in Northern Africa  Natural + nuclear disaster in Japan 5. Economic development with a maximum of risk

15. 15  Uncertain consequences for the labour market  structural improvement is still going on  some risks concern only very specialized branches  short-time work  high share of flexible employment contracts may raise unemployment as soon as we approach the business cycle turning point  Political challenges  save EMU a n d save money  manage energy supply change (nuclear power, oil)  regarding labour shortage: handle migration, ease job matching, support education, … 5. Economic development with a maximum of risk

16. Thank you. contact: sabine.klinger@iab.de www.iab.de