Economic crisis in Bavaria: Reduction and high unemployment threaten!

On January 5, 2025, current reports show a worrying trend on the job market in Germany. The unemployment rate is 0.4 percentage points above the previous year's value, and the unification of the Bavarian Economy e. V. (VBW) sees no improvement in this area at the end of the year.

The demand for specialists remains worrying due to a continuing downward trend. Around 119,800 jobs are currently registered, which means a decline of 2.6 percent compared to the previous month. In the previous year comparison, the decline is even 14.6 percent. In addition, the ads for short -time work continue to increase. Bertram Brossardt, General Manager of VBW, describes the situation as a massive economic and structural crisis.

economic challenges and forecasts

The job structure is permitted, especially in industry and in the construction industry. It is worrying that 41 percent of companies are planning to reduce positions in the Bavarian metal and electrical industry. For 2025, a decline in the number of employees in the M+E industry is predicted to 841,000, which means a loss of another 20,000 jobs. The VBW does not expect any impulses from the outgoing federal government for 2025.

A comprehensive need for reforms is required after the upcoming Bundestag election in February. Companies urgently need relief from bureaucracy as well as high costs for energy, taxes and social security contributions. For the year 2025, zero growth is predicted in Bavaria after a decline in gross domestic product (GDP) is expected by 0.4 percent for 2024

Wolfram Hatz, President of the VBW, comments on the competitiveness of the Germany location and calls for a sustainable and immediate turn in economic policy. An improvement in the location conditions and reduction in bureaucracy is required. There are also worries about geopolitical challenges and trade barriers and the VBW demands a restart for Germany to overcome the current structure and economic crises.

At the same time, a report by the Federal Employment Agency shows that unemployment rose to 2,787,000 on average 2024, which corresponds to an increase of 178,000 compared to 2023. The average unemployment rate for 2024 is 6.0 percent, an increase of 0.3 percentage points compared to the previous year. The increase in unemployment is attributed to the weak economic development and the declining demand for workers.

The underemployment also increased, and the use of short -time work remained at an increased level, with an average of 320,000 short -time workers in 2024. This safe mathematically work for around 90,000 employees. While employment increased by 72,000 to 46.08 million, the demand for workers decreased to an average of 694,000 reported jobs, which means a decrease of 67,000 compared to 2023

For further information on the development on the labor market and questions about unemployment, the detailed reports from webecho-bamberg.de and Federal Employment Agency consulted.