The domestic labor market is characterized by high but declining employment and labor shortages in many areas.

By: Trademagazin Date: 2025. 07. 14. 09:57

In the first months of 2025, the number of employed people approached 4.7 million, then fell to 4 million 669 thousand in May 2025, so the three-month average for March–May was 25 thousand people lower than the same period of the previous year. The employment rate is 75% in the 15–64 age group. At the sectoral level, the service sector, which accounts for about two-thirds of the labor market, is driving employment. A structural transformation is taking place in industry: a decline is visible in traditional industries, while new plants are being established (battery factories, electric transition in the automotive industry), which will later create new (mainly guest worker) jobs.

According to the GKI’s monthly surveys, companies’ willingness to hire shows uncertainty in the first months of 2025: in May 2025, the proportion of companies planning to increase their workforce in the next three months was 9%, while 12% would like to reduce their workforce. In trade and construction, those planning to reduce their workforce are in a clear majority compared to those planning to expand, in industry these two proportions are roughly the same, while in business services, staffing is expected to increase.I

New jobs are created primarily in the private sector – for example, in logistics, business services, tourism and in newly launched industrial investments, staff expansion is expected. Layoffs tend to occur in the public sector or in certain areas of traditional industry. At the same time, in some sectors (e.g. in the manufacturing industry) a trend is emerging that the positions of employees who leave due to retirement or job changes are increasingly being filled. In addition, the labor shortage is causing significant problems for every third service provider, every fourth construction company and every fifth industrial company. Many companies have difficulty finding suitable people for positions requiring high levels of expertise in engineering, IT, healthcare and other fields. There are also several shortages of physical professions (e.g. construction workers, machine operators, drivers), and the hospitality and tourism industries are also struggling with a shortage of professionals (partly due to low earnings).