German hospitality, retail firms put more staff on shorter hours in December

BERLIN (Reuters) – Coronavirus restrictions in hospitality and retail pushed up the number of German employees put on reduced working hours in job protection schemes in December, the Ifo economic institute said on Wednesday.

The number of workers on short-time work schemes, also known as Kurzarbeit, rose by nearly a quarter to 879,000 from 712,000 in November, Ifo estimates based on its monthly business sentiment survey showed.

“The jump in coronavirus cases increased short-time work in the hospitality and retail sectors in particular,” Ifo researcher Sebastian Link said.

The number of short-time workers increased to 126,000 from 75,000 in hospitality, and to 53,000 from 23,000 in retail.

In manufacturing, it rose to 390,000 from 381,000 as factories continue to struggle with supply shortages in microchips.

High infection rates during the fourth coronavirus wave in Germany, triggered by the Delta variant, resulted in restrictions for retailers and service providers in December.

Germany banned unvaccinated people from entering non-essential establishments. The so-called 2G rule, which allows access only for vaccinated or recovered people, hit Christmas business. In addition, the rapid spread of the Omicron variant is clouding the outlook for retailers.

The Labour Office has cautioned the jump in COVID-19 cases and renewed restrictions to contain the spread of the disease increased uncertainties for the labour market.

In a sign of this, more companies signalled they could soon put more workers on furlough again.

In October, the latest month for which reliable data was available, the number of employees on Kurzarbeit schemes fell to 710,000. That was down sharply from a peak of around 6 million in April 2020.

(Reporting by Michael Nienaber; Editing by Miranda Murray and Mark Potter)