Germany’s employment level remained broadly unchanged in 2025, ending a long run of steady growth, while unemployment rose sharply amid economic weakness and demographic pressures, official data showed on Thursday.
An annual average of around 46.0 million people were employed in Germany in 2025, down by 5,000 jobs compared with the previous year, according to a preliminary estimate from the Federal Statistical Office (Destatis). Employment had reached a record high in 2024, the highest level since reunification in 1990.
With the exception of the pandemic year in 2020, Germany’s employment figures had increased continuously since 2006. However, growth slowed markedly from early 2024 and edged slightly into negative territory over the course of 2025.
Destatis attributed the stagnation to a cooling labour market and structural demographic trends, as large cohorts of older workers exited employment while fewer young people entered the workforce.
Net immigration and higher participation rates among women and older workers continued to support labour supply, but were insufficient to drive overall growth.
Services offset wider job losses
Employment gains in 2025 were limited to the service sector, which accounted for 75.9% of total employment, up from 75.6% a year earlier. The number of people working in services increased by 164,000 (+0.5%) to 34.9 million.
The strongest growth was recorded in public services, education and health, which added 205,000 jobs (+1.7%), driven mainly by healthcare.
Employment also rose in financial and insurance activities (+16,000) and other service activities, including associations and membership organisations (+26,000).
By contrast, employment declined in business services, including temporary employment agencies, which lost 64,000 jobs (-1.0%). The information and communication sector shed 10,000 jobs (-0.6%), ending nearly a decade of continuous growth. Employment in trade, transport, accommodation and food services fell slightly by 15,000(-0.1%).
Industry and construction under pressure
Outside services, job losses were concentrated in industry and construction. Industrial employment, excluding construction, declined by 143,000 (-1.8%) to 7.9 million.
Employment in construction fell by 23,000 (-0.9%) to 2.6 million. The share of total employment in industry decreased to 22.8%, down from 23.2% in 2024.
Employment in agriculture, forestry and fishing continued its long-term decline, falling by 3,000 (-0.5%) to 562,000.
Unemployment climbs despite stable employment
Despite stable overall employment, unemployment increased significantly in 2025. Provisional labour force survey data showed the number of unemployed rose by 161,000 (+10.8%) to 1.7 million on an annual average.
The total labour force increased slightly to 47.5 million, pushing the unemployment rate up to 3.5%, from 3.1% in the previous year.
The number of employees subject to social insurance contributions rose modestly by 33,000 (+0.1%) to 42.3 million, helping to stabilise overall employment levels.
Meanwhile, the number of self-employed people, including family workers, fell by 38,000 (-1.0%) to 3.7 million, extending a downward trend that has been in place since 2012.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
