German unemployment fell to an 18-year low in January, stoking concerns that the world’s second-largest exporter is running short of skilled labor after the fastest economic expansion since reunification in 1990.
The number of people out of work declined a seasonally adjusted 13,000 to 3.135 million, the lowest since November 1992, the Nuremberg-based Federal Labor Agency said today. Economists forecast a drop of 10,000, according to the median of 32 estimates in a Bloomberg News survey. The adjusted jobless rate fell to 7.4 percent from 7.5 percent.
Falling unemployment is helping bolster German consumer spending and corporate investments, adding to the economy’s export strength. As unemployment lines shorten and the population shrinks, industrial companies face a skilled labor shortage that may restrain growth.
“The economic climate is rock solid and corporate-employment plans in most sectors are clearly expansionary,” Alexander Koch, an economist at UniCredit Group in Munich, said in a note to investors.
Schaeffler Group, the world’s second-biggest maker of roller bearings, may add about 5,000 workers this year as it prepares for sales growth exceeding 10 percent, Chief Executive Officer Juergen Geissinger said in an interview at the World Economic Forum in Davos, Switzerland, on Jan. 26.
The euro gained to $1.3753 at 11:21 a.m. in Berlin from $1.3694 in New York yesterday. The yield on German 10-year government bonds rose 4 basis points to 3.19 percent.
Booming exports to Asia and stronger household spending propelled German business confidence to a record high in January, Munich-based Ifo institute said Jan. 21. Consumer confidence will rise to the highest in more than three years this month, market research company GfK AG predicted Jan. 25.
German unemployment has fallen to second lowest among the Group of Seven nations after Japan, according to the Organization for Economic Cooperation and Development.
Federal Labor Agency chief Frank-Juergen Weise said today that unemployment “is likely to further decline,” though at a slower pace, in seasonally adjusted terms. The unadjusted jobless total will average 3 million this year, down from January’s 3.35 million, Weise told reporters in Nuremberg.
A lack of skilled labor “can already be felt today and threatens to become a serious problem for the competitiveness of our industry in the medium term,” Martin Kannegiesser, head of the Gesamtmetall lobby of engineering companies, said yesterday in Berlin.
Germany had a shortage of 84,000 workers in October in jobs requiring mathematics, computer science, technology and natural-sciences skills, and lacked 43,000 engineers, he said.
“We’ll most likely have a broader discussion about a lack of skilled workers,” said David Milleker, chief economist at Union Investment in Frankfurt.
To ease executives’ hiring problems, Chancellor Angela Merkel’s bloc of Christian Democrats and Christian Social Union are looking at ways to attract young, unemployed skilled workers from European Union countries, Spiegel magazine reported. Merkel will address the idea at a meeting with Spanish Prime Minister Jose Luis Rodriguez Zapatero in Madrid this week, Spiegel said.
The youth unemployment rate in the 27-nation EU held at 21 percent in December, Luxembourg-based Eurostat said today. The bloc’s overall jobless rate remained at 9.6 percent while the euro-region rate was unchanged at 10 percent.
Germany’s unemployment rate will slide to 7 percent this year from 7.7 percent in 2010 even as economic growth slows to 2.3 percent from 3.6 percent, according to the government’s annual economic report, approved by Merkel’s Cabinet on Jan. 19.
The lack of skilled personnel is eroding at least 30 billion euros ($41 billion) in annual revenue at Germany’s medium-sized companies, the newspaper Die Welt reported Jan. 25, citing a study by Ernst & Young LLP.
According to OECD data, Germany’s jobless rate was 6.7 percent in November. The equivalent rate in France was 9.8 percent, the U.S. rate was 9.8 percent and the Group of Seven average was 8.2 percent.