German employment hits highest level since reunification

German employment reached 44.2 million in the second quarter of 2017, but home building has declined by 7.3 percent year-on-year

 
Germany's construction sector hit record levels last year, so this year's slowdown is somewhat expected 
Author: Barclay Ballard
August 18, 2017

German employment reached a record 44.2 million in the second quarter of 2017, according to data released by the country’s Federal Statistical Office on August 17. The figure is the highest recorded in the country since reunification, and represents a 1.5 percent increase on the same period last year.

Growth in the service sector was the main driving force behind the increase, with the public service, education and health sectors posting a year-on-year rise of 2.1 percent. A spokesperson for the Federal Statistical Office also explained that although employment figures typically increase in the second quarter, the German results still represent a rise in absolute terms.

“Seasonal growth in employment is typical in the second quarter of a year due to the general increase in outdoor work in spring,” they said. “In 2017, however, the increase was higher than the relevant average of the past five years. After seasonal adjustment, that is, after the elimination of the usual seasonal fluctuations, the number of persons in employment increased by 138,000, or 0.3 percent, in the second quarter of 2017 compared with the previous quarter.”

The figure is the highest recorded in the country since reunification

However, the second-quarter results were not universally positive for the eurozone’s biggest economy. Employment continues to decline in the financial and insurance sectors, while a fall in the number of home building permits could cause a future slowdown in Germany’s construction industry.

Residential building permits fell by 7.3 percent for the first half of the year, with authorities issuing 13,400 fewer when compared with the same period in 2016. Construction, and home building in particular, has become a key driving force in the German economy, with population growth and the low cost of borrowing causing a rise in demand.

This year’s fall in home building should, however, be placed in the context of 2016’s higher-than-average figures. Residential building permits reached their highest levels since 1999 last year, with more homes being required to cope with Germany’s record influx of refugees.