The ifo Institute reports the Employment Barometer climbed to 94.8 points in August 2026, up from 93.0 in July. Companies plan fewer job cuts, though overall employment is still declining.
The ifo Institute reported an Employment Barometer of 94.8 points for August 2026, up from 93.0 points in July, the highest reading since May 2025. In manufacturing, the pace of job cuts slowed sharply, with the sector index reaching its best level since March 2024. Exceptions planning to add staff include makers of computer equipment as well as electronic and optical products, and the food industry. Retail also improved, though wholesale and retail trade still lean toward workforce reductions overall. In services and construction, expansion and cutback plans roughly cancel out, keeping staffing levels steady.
For executives and HR leaders, the reading signals that pressure to cut jobs is easing, without yet pointing to broad hiring growth. The computer equipment and electronics segment, closely tied to AI hardware and semiconductors, stands out with plans to add staff, suggesting continued demand for specialists in that field while traditional retail keeps shedding positions.
ifo economist Timo Wollmershaeuser notes that companies are still cutting jobs on balance. The barometer remains below the 100-point mark that would indicate no change at all. It remains open whether this recovery continues into autumn 2026 or gets slowed again by new economic headwinds.
What this means for decision-makers
- Check whether your industry belongs to growth segments such as computer equipment or food production before adjusting staffing plans.
- Track the next ifo readings to see whether the stabilizing trend continues.
- Plan tech-related hires with cautious optimism, since that segment already reports staff growth.
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