Anticipate increased usage of temporary employment in machinery manufacturing industry - Anticipate Increased Use of Temporary Workforce by Manufacturers
Amid Slim Optimism, Machinery Manufacturers Anticipate Increased Use of Short-Time Work in Southwest Germany
In spite of indications of economic recovery, numerous machinery manufacturers in the southwest anticipate a surge in the use of short-time work, a measure that allows companies to reduce working hours for their employees during downturns. Mathias Kammüller, the chairman of the Association of German Mechanical Engineering (VDMA) in Baden-Württemberg, shared this forecast in a recent survey of approximately 200 machinery manufacturers in the region.
According to Kammüller, nearly one-third of companies surveyed expect significant demand growth in the next six months. However, this optimistic outlook comes in the face of ongoing structural challenges and sector-specific volatility within the machinery manufacturing industry. Factors contributing to this uncertainty include global demand fluctuations, supply chain disruptions, and ongoing economic uncertainty.
The use of short-time work, or Kurzarbeit, has become increasingly common among machinery manufacturers in the region due to low production utilization. As a result, many companies have announced job cuts since the beginning of the year. For example, laser specialist Trumpf, based in Ditzingen near Stuttgart, has announced plans to reduce its workforce by around 1,000 positions, with around 430 of these reductions occurring in Germany.
Despite these challenges, employers in the region recognize the worsening skills shortage due to demographic trends. As a result, most companies are seeking to retain their core workforce as much as possible through the use of short-time work. In March, short-time work was registered for more than 3,200 industry employees in the region, according to VDMA data.
Short-time work provides companies with a certain degree of flexibility while helping them avoid layoffs during difficult economic periods. When a company faces significant, unavoidable loss of work for at least one-third of its employees, employers can reduce working hours, and employees receive a short-time work allowance to help offset the reduction in wages.
Despite the ongoing challenges, machinery manufacturers in the southwest are hopeful that the industry will gradually regain momentum in the second half of the year. According to Kammüller, this optimism stems from the recent rebound in German factory orders, which grew by 3.6% month-over-month in March 2025. However, the industry remains cautious, with only just over 40% of companies expecting an increase in sales in 2025, while more than 60% anticipate stagnating or falling revenues.
Machinery and plant engineering is a vital industry in the southwest, with well-known companies such as Trumpf, Voith, Dürr, Festo, Hermle, and technology group Bosch. Despite these challenges, German machinery manufacturers continue to invest in advanced technologies like lasers, automation, and AI to maintain their competitiveness. Their participation in international trade fairs also underscores their focus on networking and seeking new business opportunities, even as domestic demand fluctuates.
In summary, increased use of short-time work among machinery manufacturers in southwest Germany reflects ongoing structural challenges and sector-specific volatility, even as broader economic indicators may show signs of short-term resilience. A gradual recovery is anticipated, provided global demand recovers and continuing technological leadership is maintained by industry leaders.
To mitigate economic uncertainty and avoid layoffs, machinery manufacturers in southwest Germany are increasing their use of short-time work, while simultaneously addressing the worsening skills shortage due to demographic trends by retaining core workers. This industry, including companies like Trumpf, Voith, Dürr, Festo, Hermle, and Bosch, is investing in advanced technologies like lasers, automation, and AI to maintain competitiveness and participate in international trade fairs for networking and business opportunities. In the finance and business realm, these efforts aim to ensure the industry's resilience amid ongoing sector-specific volatility and global demand fluctuations. To foster a harmonious community, it is essential for the policy makers to support vocational training programs that will help address the skills gap and provide opportunities for a sustainable workforce in the machinery industry.
