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German employment survey plummets to historic low as coronavirus crisis hits

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Key Points
  • The latest reading represents a "historic low," where all four sectors (manufacturing, construction, services and trade) faced sharply lower employment.
  • In a separate release, German exporters revealed concerns about their prospects too.
  • Earlier this month, the International Monetary Fund (IMF) forecast a 7% contraction in Germany this year, on the back of the ongoing pandemic.
Bloomberg

Germany is experiencing an "unprecedented" drop in employment levels, the German economic institute Ifo said on Tuesday, as the coronavirus pandemic hits Europe's growth engine. 

The Ifo's employment barometer dropped to 86.3 points in April, having reached 93.4 points in March. The latest reading represents a "historic low," where all four sectors (manufacturing, construction, services and trade) faced sharply lower employment.

"There has never been such a marked decline in the barometer itself, which will correspond to a rise in unemployment in Germany," the Ifo institute said in a statement on Tuesday.

In a separate release, German exporters revealed concerns about their prospects too.

The Ifo's export expectations for manufacturing plummeted to -50.0 points in April, down from -19.0 points in March.

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The picture is particularly gloomy for some of the country's key industries, such as automotive manufacturing and mechanical and electrical engineering.

"This is the lowest value ever measured, and the severity of the decline is also unprecedented. The coronavirus pandemic is leaving deep scars on export markets," the Ifo said in a statement.

Earlier this month, the International Monetary Fund (IMF) forecast a 7% contraction in Germany this year, on the back of the ongoing pandemic. The IMF also estimated a 3.9% unemployment rate in Germany for 2020, up from 3.2% last year.

Germany first introduced lockdown measures on March 22, but it has since started to slowly lift some of these restrictions. Smaller shops have reopened their doors as well as bike stores, bookstores and car dealerships.

Germany has had 158,758 confirmed infections from Covid-19 and 6,126 deaths, according to the latest figures from Johns Hopkins University. Health experts have said the robustness of the German healthcare system has contributed to a relatively low number of deaths when compared to total cases.