Forecast for 2026: The changing job market
The German labor market is facing decisive changes. After three years of economic weakness, the Institute for Employment Research (IAB) expects only modest economic growth of 0.2 percent in the current year 2025. For the coming year 2026, researchers expect a moderate upturn of 1.1 percent. This development is supported by government financial measures designed to relieve the burden on companies and stimulate investment.
Despite this slight stabilization, the labor market remains tense. According to the IAB, the number of people in employment will rise only minimally by around 10,000 in 2025 and is likely to decline slightly in 2026. The reason for this is demographic change: more and more employees from the baby boomer generation are reaching retirement age, while fewer young people are entering the workforce. This means that the potential labor force is declining for the first time—a trend that is further exacerbating the shortage of skilled workers.
There are significant differences between industries. The manufacturing sector is expected to lose around 130,000 jobs in 2025, with a further 70,000 likely to be lost in 2026. In contrast, employment in public services, education, and health care is growing significantly: around 210,000 new jobs will be created in 2025 and around 130,000 in 2026. As a result, the labor market is increasingly shifting toward service-oriented activities.
There also remain significant regional differences. According to the IAB forecast, the average annual unemployment rate in 2026 will be around 6.3 percent, with figures ranging from 4.0 percent in Bavaria to 11.7 percent in Bremen. Overall, the market appears stable but increasingly challenging, requiring flexible and sustainable solutions.
Our response to the changes
As the AlphaConsult Group, we have been supporting companies and people in Germany through change and growth for over 40 years. As a system service provider for personnel and HR solutions, we see ourselves as a strategic partner offering all processes related to work, employment, and training from a single source. With more than 180 branches, we develop tailor-made personnel concepts for a wide range of industries – from manufacturing and skilled trades to nursing, administration, and services.
As a system service provider, we rely on modern recruiting methods, digital tools, and efficient processes to attract new skilled workers and make the most of existing potential.
Our outlook: The job market will remain challenging in 2026. But with experience, reliability, and a clear focus on people, quality, and systemic solutions, we support companies and applicants in achieving mutual success – even in times of change.