(de-news.net) – Job vacancies fell to about 1 million in the second quarter of 2026 as upgraded economic forecasts pointed to a gradual recovery. Efforts to address shortages in health care and child care are proceeding alongside persistent inflation, fiscal pressures and structural economic constraints.
The Institute for Employment Research (IAB) reported that Germany had roughly 1 million job openings in the second quarter of 2026, marking a continued weakening in labor demand. The figure was 129,800, or about 11 percent, below the previous quarter and 35,000, or approximately 3 percent, below the level recorded a year earlier. According to IAB labor market researcher Alexander Kubis, the demand for workers had reached its lowest level since 2016, apart from the exceptional decline recorded during the coronavirus lockdowns in 2020. The figures point to a labor market that has lost momentum even as other parts of the German economy show signs of a gradual recovery.
About 81 percent of the vacancies were available for immediate recruitment. Western Germany accounted for 820,400 openings, while 203,000 were recorded in eastern Germany. Across the country, an average of 291 registered unemployed people competed for every 100 advertised vacancies, representing an increase of 27 compared with the previous quarter and 14 compared with the same quarter a year earlier. The deterioration in this ratio resulted from both sides of the labor market moving in an unfavorable direction: the number of available positions declined while unemployment increased.
Domestic structural weaknesses and international conflicts continued to restrain employers’ demand for labor during the first half of 2026, according to Kubis. Another indication of the weaker market was the growing number of applications received by companies for positions covered by social insurance. Recent research showed that the average number of applications associated with such a recruitment process increased from nine in 2022 to 16 in 2025. The development suggests that a smaller number of vacancies is being met by a larger pool of applicants, reflecting the changing balance between labor supply and demand.
Against this backdrop, Federal Health Minister Carsten Linnemann (CDU) plans to accelerate the admission of physicians and pharmacists who received their training abroad. A ministry regulation scheduled to take effect in November would establish uniform federal standards while streamlining the recognition of foreign qualifications for physicians, dentists, pharmacists and midwives. The proposed procedures would be conducted digitally, and authorities would be required to accept documents in English. By reducing administrative barriers and standardizing the process, the government expects the changes to make it easier for foreign-trained health professionals to enter the German system, with potential benefits for health care providers and patients.
The need for additional medical personnel is particularly pronounced outside Germany’s major urban centers. The Central Institute for Statutory Health Insurance Physicians estimates that the country could face a shortage of about 50,000 physicians by 2040, especially in rural areas. More than one-third of Germans also report experiencing a shortage of doctors in their region, according to a DAK Gesundheit survey. Under the proposed regulations, people who began medical or pharmacy training abroad could, in exceptional circumstances, complete their education in Germany. The provision could also make it easier for trained professionals from Ukraine to obtain authorization to practice.
The new regulation supplements legislation already adopted to accelerate the recognition of foreign qualifications in health professions. The Bundesrat is scheduled to consider the measure on Oct. 16, marking another step in the government’s effort to shorten procedures that can otherwise delay the entry of qualified foreign professionals into Germany’s health care system.
Economic recovery gains ground
Meanwhile, the Didacta Association has warned that staffing reductions could undermine planned improvements to language support in daycare facilities. The organization has argued that effective language development depends on sufficient numbers of qualified employees and has called for clearly defined responsibilities to be incorporated into calculations of staffing requirements. Rather than allowing declining birth rates to result in lower staffing levels, the association said, the demographic change should be used as an opportunity to improve care ratios throughout Germany. The issue places staffing capacity at the center of efforts to strengthen early language development.
The warning followed the Cabinet’s approval of daycare legislation that would introduce measures including language assessments to identify when children require specific early-support programs. Yet staffing shortages remain a constraint for many facilities. A report by the Paritätische Gesamtverband found that numerous daycare centers continue to operate under severe personnel pressure despite the decline in the number of children. The situation illustrates the tension between efforts to expand targeted early education measures and the availability of the personnel needed to implement them.
At the same time, the Ifo Institute has significantly upgraded its forecast for Germany’s economic growth, pointing to a somewhat more favorable outlook after a prolonged period of weakness. The Munich-based researchers now expect gross domestic product to expand by 1.4 percent in 2026, an increase of 0.6 percentage points from their previous projection. Growth is then forecast at 1.2 percent in 2027 and 0.8 percent in 2028. Other research institutes have also become more optimistic: DIW Berlin projects 1.2 percent growth this year, while the RWI Institute expects 1.3 percent. The revised forecasts indicate that the economy has performed better in the first half of the year than earlier expectations had suggested.
The improved assessment reflects both revised historical data from the Federal Statistical Office and a stronger evaluation of Germany’s underlying economic momentum. Ifo researchers now see greater support from fiscal policy and external demand, while assessing the drag caused by the energy-price shock as less severe. Stronger foreign demand, together with increased German spending on infrastructure, climate measures and defense, is helping to offset the effects of higher energy costs and low water levels on rivers. The industrial sector, which has been particularly affected by Germany’s economic difficulties, is also showing some indications of improvement.
The more supportive fiscal stance, however, is expected to come with a substantial increase in government financing deficits. According to the forecast, the budget deficit will widen from 3.0 percent of GDP in 2025 to 4.6 percent in 2028. Over the same period, gross public debt is projected to rise from 62.7 percent to 67.9 percent of economic output. The figures underscore the fiscal costs associated with the expansionary policy approach that is helping support economic activity, even as Germany’s growth outlook becomes more positive.
Inflation is also expected to remain a constraint on the recovery. The Ifo forecast puts inflation at 2.8 percent in 2026 and 3.0 percent in 2027, before it declines to 2.3 percent in 2028, bringing it closer to the European Central Bank’s target. Although price pressures from fuel and heating oil are expected to ease over the forecast period, electricity and gas prices could rise again during the winter. As a result, high inflation is expected to continue weighing on household consumption even as the broader German economy moves further into recovery. The combination of improving growth prospects, persistent price pressures and a weakening labor market therefore presents a mixed picture of Germany’s economic trajectory.
