Demand for labour continues to fall significantly

The BA-X job index acts as an indicator, enabling statements to be made about labour demand in Germany. Comparing December 2019 to November 2019, the BA-X dropped five points to 223 points. December 2019 is also 31 points below the previous year's value. Even if labour demand can be kept at a high level in the longer term, a further decline can be expected.

Why is labour demand falling in Germany?

The decline in the BA-X job index is mainly due to the weaker economic development in recent months. This more moderate rate of development led to a reluctance on the part of companies to find and hire new employees. Labour demand has declined particularly in business-related sectors, but also in qualified business services. In addition to sectors such as transport & logistics, temporary work and the manufacturing sector, this also includes the retail sector, the utility industry and the hospitality industry. On a more positive note, it should be emphasised that there was an increasing demand for labour in companies and sectors that are more independent of the economy, such as education, health and social services, and public administration.

Temporary employment agencies have a high proportion of job vacancies

Around 15 percent of the total number of jobs are located in the retail and logistics sector. Nine to eleven percent of vacancies are advertised by companies in the health and social sectors, as well as the manufacturing sector. Qualified business services reported eight percent of all vacancies, closely followed by the construction industry at seven percent. Temporary employment agencies reported 29 percent of the total job vacancies, which means that this industry plays a crucial role in developing the demand for workers.

The concept of BA-X and how it is calculated

As mentioned before, the BA-X is the job index calculated by Germany’s federal employment agency (BA). The BA-X job index serves to map the development of labour demand in the primary labour market. When calculating the BA job index evaluation, the basis is all non-promoted jobs that are reported to the BA. In addition, the BA also takes into account jobs reported by private recruitment agencies, jobs for freelancers and jobs for the self-employed. Since July 2014 and applied retrospectively back as far as January 2013, jobs from cooperation partners have also been included. Employers transmit these to the BA via a technical interface.
The BA job index includes both newly reported jobs and current vacancies. While the newly reported jobs reflect the dynamism of the monthly hiring process and companies’ personnel requirements, the number of vacancies indicates the level of labour demand. The level of labour demand is thereby restricted to the length of time that a vacancy is posted. The use and mapping of newly reported jobs and staffing levels provides insights into the willingness of companies to hire workers, as well as potential difficulties in filling vacancies.
All newly reported jobs and staffing levels then undergo seasonal or calendar adjustment in order to calculate the BA-X. The mean value of the number of available jobs and vacancies is then determined. Deviations from the reference value (2004 annual average), which was nominated at 100, are then calculated. As the seasonal or calendar adjustment is carried out every month for the entire time series, there may be deviations from previously published monthly versions of the BA-X job index.

(Source: German Federal Employment Agency, December 2019)

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