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Dresden. Alarm signals for Vogtland and North Saxony: unemployment there will rise by more than six percent next year. In the district of Sächsische Schweiz-Osterzgebirge, however, it will remain the same. For Saxony as a whole, the Institute for Employment Research of the Federal Employment Agency in Nuremberg (IAB) expects 3.6 percent more unemployed people on average next year than this year.
Researchers expect above-average increases in unemployment rates next year, particularly in the eastern federal states, said Rüdiger Wapler from the IAB forecasting team. Unemployment will rise the most in Thuringia, by five percent. Saxony and Bavaria are also expected to see "quite high increases" of 3.6 percent each. However, Bavaria will remain the state with the lowest unemployment rate in Germany. According to the forecast, the unemployment rate in Bavaria will rise to 3.8 percent next year. Saxony's, on the other hand, will rise to 6.6 percent, compared to an average of 6.4 percent in 2024. This means that Saxony remains in the middle of the pack compared to the rest of Germany. The highest unemployment rates are expected in Bremen and Berlin.
The Nuremberg researchers speak of "economic stagnation" and do not expect employment to grow as strongly as before the coronavirus pandemic or the Russian war of aggression. According to Wapler, employment is declining in rural areas in particular, but is continuing to grow in urban regions. The IAB researchers find the greatest "disparities" nationwide within Saxony: "For Dresden and Leipzig, developments are expected to be significantly more favorable than in the agency districts of Annaberg-Buchholz and Freiberg, for example."
Unemployment remains constant in only one Saxon district
According to the forecast, an average of 20,000 people will be registered as unemployed in the state capital Dresden this year, and 3.5 percent more next year. The IAB forecast predicts a 2.0 percent increase in unemployment in Leipzig and 5.4 percent in Chemnitz. The strongest increase is expected for the Plauen employment agency district: 7.6 percent. In the district of Sächsische Schweiz-Osterzgebirge, on the other hand, the number of unemployed is forecast to remain at 6,700, the same as this year. The percentages given are mean values. The researchers have also specified upper and lower limits.
The economic environment remains uncertain, the researchers write. A faster recovery in consumption and stronger foreign trade are likely to have positive effects. However, if trade conflicts escalate or geopolitical tensions continue to rise, developments on the regional labor markets could also deteriorate.
The path out of unemployment is getting longer
Job opportunities for the unemployed remain worse than before the coronavirus pandemic, according to the IAB report. Unemployment in Germany is expected to rise by 6.5 percent this year and by 2.2 percent next year. This is mainly due to "fewer people leaving" and remaining unemployed for longer. Employment will continue to rise in western Germany next year, but will stagnate in eastern Germany.
The forecast also includes information for the Saxon employment agency districts not only on the development of unemployment, but also on the number of employees with social insurance. Self-employed persons and mini-jobbers are not included. According to the IAB, the number of employees in Leipzig will rise by 1.8 percent next year, followed by Dresden with 1.2 percent. A decline of 0.3 percent is predicted for Chemnitz. The researchers expect the strongest decline within Saxony for the employment agency districts of Freiberg and Annaberg-Buchholz at 1.4 percent each. For the agency district of Bautzen, which also includes the district of Görlitz, the researchers expect a 0.5 percent decrease in the number of employed people and a 2.5 percent increase in the number of unemployed people to 20,200. In Saxony as a whole, the average annual number of unemployed people will rise from 137,200 this year to 142,200 on average in 2025.
Saxony's employment agency boss Klaus-Peter Hansen had said in Chemnitz at the end of September, that the usual autumn upturn in Saxony's labor market will fail to materialize this year. He sees "no trend reversal" for the coming months. However, the number of unemployed will fall slightly in the coming months. Skilled workers will still be needed.
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