German companies plan fewer job cuts as economy rebounds, Ifo says

By Maria Martinez

BERLIN, Aug 27 (Reuters) - Germany's nascent economic recovery is beginning to have a positive impact on the labour market, with job cuts slowing in August, according to a survey by the Ifo economic institute.

The Ifo employment barometer rose by 1.8 points to 94.8 points in August, the institute said on Thursday, reaching its highest level since May 2025.

"The labour market is showing a slight upward trend," said Ifo's Timo Wollmershaeuser. "Overall, however, jobs are still being cut."

HOPE FOR INDUSTRY

The Ifo business climate index rose more than expected in August, data showed on Tuesday, following a stronger-than-expected rise in investor morale as well as stronger exports and industrial production in June.

In manufacturing, job cuts have lost momentum, with Ifo's employment barometer climbing to its highest level since March 2024.

Although the majority of sectors continue to focus on cuts, positive exceptions are manufacturers of data processing equipment, electronic and optical products, as well as the food industry.

Although the employment barometer improved in trade, plans to cut staff continue to predominate, while in construction and services, the number of employees should remain constant.

Labour market data for August will be released on Friday. Economists polled by Reuters expect the unemployment rate to remain unchanged at 6.4%.

(Reporting by Maria Martinez, Editing by Miranda Murray)