Germany’s labor market offered new signs of strength by reaching a new employment record of 45.9 million employed people in 2023, a figure that exceeded the average recorded in 2022 by 333,000 and represents a new high since the country’s reunification in 1990, as announced this Tuesday by the Federal Statistics Office (Destatis).

In this way, employment growth in Germany completed its third consecutive year, after the pandemic caused in 2020 the first decrease in employment after 14 years of growth, with a decline of 361,000 employed people compared to the 2019 figure.

“One of the reasons for the increase in employment in 2023 was the immigration of foreign workers,” explained Destatis, adding that in 2023 the labor force participation of the German population also increased. “These two growth spurts offset the discouraging effects of demographic change on the labor market, which is likely to lead to a significant decline in the working-age population in the medium term,” the Office added.

Last year, nine out of ten new employees found work in the services sector, which recorded an increase in employment of 295,000 people, to around 34.6 million employees in 2023.

On the other hand, apart from the services sector, employment increased at a much slower pace, since in the manufacturing sector (excluding construction), the number of employed people increased by 25,000, to around 8.1 million people and remains “still very far” from the pre-crisis level.

The construction sector, for its part, once again provided positive momentum with an increase of 15,000 employees in 2023, to around 2.6 million.

In contrast, in the agriculture, forestry and fishing sectors, 2,000 fewer people were employed than in 2022, up to a total of 555,000 people, maintaining the negative trend of previous years.

On the other hand, Destatis indicated that the decisive factor for the positive evolution of the German labor market in 2023 was the number of employees, which grew by an average of 363,000 people, up to 42.1 million, while in the case of the self-employed it continued the downward trend that has been occurring for 12 years and their number was reduced by 30,000 people, to 3.9 million.

Likewise, according to preliminary estimates based on the labor force survey, the number of unemployed in Germany fell slightly in 2023 by 9,000 people or -0.7%, to an average of 1.3 million.

The number of people actively available in the labor market, defined as the sum of employed and unemployed, increased by 314,000 people (0.7%) to 47.1 million in the same period. The unemployment rate, measured as the proportion of unemployed to the number of employed, fell from 2.9% to 2.8% compared to the previous year.