Ifo: Job cuts in Germany slowing but not enough for a turnaround

Job cuts at companies in Germany slowed somewhat in March, the ifo Institute's Employment Barometer, published on Friday, showed.

The March index rose to 93.4 points from February's 93.1, but economists at the Munich-based institute said that's not enough to produce a turnaround.

"Although companies are planning somewhat less frequently to cut jobs, it is still too early to speak of a real trend reversal," noted Klaus Wohlrabe, ifo's head of surveys.

He said plans for job cuts remained in place in almost all sectors, albeit less pronounced than recently. "The structural adjustment process in industry continues," Wohlrabe said.

For companies in the services and construction sectors, plans for redundancies and hiring were roughly balanced. On the other hand, the retail sector wanted to cut more staff.

Growth despite uncertainty

Germany's economy is expected to return to modest growth this year thanks to the government's €500 billion ($576 billion) stimulus package. However, the Iran war is causing considerable uncertainty, above all due to sharply rising energy prices.

"The current geopolitical situation remains an uncertainty factor," Wohlrabe said.

"If conditions continue to deteriorate, it could place a greater burden on the labour market again."