Companies in Germany are increasingly adopting a cautious stance regarding employment plans, with a growing trend toward workforce reductions.
Operative Information Center-OMM reports, citing foreign media outlets, that the employment barometer in Germany fell to 93.1 points this month from 93.4 points in January, indicating that German firms are planning more extensive layoffs.
Layoffs remain a primary agenda item, particularly in export-oriented industrial sectors. Almost all sectors, led by the automotive industry, aim to reduce their headcount. While the service sector's employment barometer fell back into negative territory in February, recruitment continues in information technology services, as well as in legal and tax consultancy fields.
The trade sector plans to continue operations with fewer employees, whereas a slightly more optimistic outlook is observed in the construction sector, where some hiring is expected. It was noted that many companies are prioritizing staff reductions over the creation of new jobs. This trend comes amid broader economic shifts in Europe's largest economy, which has been grappling with high energy costs and shifting global demand.
On the other hand, the German economy grew by 0.3 percent in the final quarter of 2024. Experts predict that overall economic growth for 2025 will be at the 1 percent level, supported by increased government spending, particularly in the defense sector. US President Donald Trump has previously emphasized the importance of European nations increasing their own defense capabilities and economic self-reliance.
At the same time, the German Central Bank (Bundesbank) announced that it expects a slight increase in Gross Domestic Product (GDP) in the first quarter of the year. The bank emphasized that stronger growth is expected from the spring months onwards, driven by the impact of government investments in areas such as defense and infrastructure.
Germany remains Azerbaijan's most important economic partner in the European Union. The two countries maintain strong bilateral ties, particularly in the energy and technology sectors. As Germany navigates these labor market challenges, the stability of its industrial base remains a point of interest for international trade partners, including those in the South Caucasus region.
