Economy in crisis: Skilled labor shortage is slowing the upswing!

Economy in crisis: Skilled labor shortage is slowing the upswing!

There is currently a great need for clear analyzes in Germany, and this is exactly what leading economic research institutes are offering with their latest joint diagnosis. After two years of severe recession, the German economy has bottomed out, but there is still no significant upswing. “The crisis was deeper than previously reported,” says the analysis published by vci.de. Structural weaknesses, including excessive bureaucracy, a shortage of skilled workers and a backlog of reforms, are slowing growth. In addition, the energy price crisis is hampering progress in the energy-intensive industry and geopolitical tensions are increasing uncertainty.

Against this background, the VCI business briefing on October 9, 2025 will provide answers to the pressing questions about the current situation in the individual sectors. Moderated by Johann-Peter Nickel, Managing Director of the Chemical Industry Association, experts such as Adrian Keppler, Senior Economist at Helaba, and Christiane Kellermann, Senior Manager of the Association, will share their perspectives.

The shortage of skilled workers as a deeper problem

The problems are not only of an economic nature, but also deeply rooted in the labor market. By the mid-2030s, the German labor market could be missing between 1.5 and 5.5 million people in employment, warns deloitte.com. The energy industry will be particularly hard hit, as the age structure of the workforce and decentralized services could lead to a loss of skills. Energy companies must therefore take urgent measures to address the shortage of skilled workers.

A white paper examines various strategies: from increasing process efficiency to new cooperation models to training on demand. Time is of the essence because hesitant action could have dramatic consequences for competitiveness. The shortage of skilled workers could also challenge the entire industry and endanger its ability to work and offer services.

Growing challenges and future prospects

There is currently a shortage of almost 400,000 skilled workers in Germany. Projections suggest this deficit could rise to around 700,000 by 2027. The labor market is in transition, and while many companies are cutting jobs or not filling them, new jobs are being created in promising areas such as renewable energies, care and healthcare. [Deutschlandfunk](https://www.deutschlandfunk.de/fachkraefte Mangel-deutschland-wirtschaft-demografie-rezession-100.html) reports that the requirements of employers often do not match the profiles of job seekers, which further complicates the situation.

While the unemployment rate among graduates remains low, industry, particularly the automotive sector, has lost competitiveness in recent years. The job prospects in the IT sector are also currently less promising, while at the same time skilled workers from the craft and social sectors are in greater demand. With the labor force predicted to decline from 51 million to 48 million by 2040, demand for specialized workers will continue to increase in the coming years.

The future of the German labor market is therefore uncertain, and without comprehensive reforms and targeted immigration to combat the skills shortage, the usual dynamic will be difficult to achieve. Nevertheless, there are hopes for a gradual recovery with growth of around 1.3 percent for 2026 and 2027, based on expansionary fiscal policy and debt-financed investment projects. The only question is whether the framework conditions will be adjusted in time to meet the emerging challenges.