Engineering job market under pressure: Skills are lacking

Crisis hits engineering job market

The new VDI/IW engineering monitor for the third quarter of 2025 shows a significant slowdown in the engineering job market. The total number of job openings in the IT and engineering sectors fell by 23 percent compared to the previous year, to just 99,470. Particularly affected are IT professions with a decrease in job openings of 37.7 percent, as well as engineering professions in plastics production and the chemical industry, where the decline is 25.1 percent.

Despite these setbacks, there are also stable areas. Engineering professions in metal processing recorded a slight increase of 3.6 percent in job openings. A complete withdrawal of demand for skilled workers is therefore not observed - on the contrary: a long-term increase in demand is expected.

“Nevertheless, in the coming years, due to digitalization, climate protection, demographic change, as well as investments in infrastructure and other special funds, the demand for employees in engineering and IT professions is expected to increase again,” explains VDI labor market expert Maximilian Stindt.

Skilled labor shortage remains a central issue

Despite the decline in job vacancies, there is still a significant shortage of skilled workers in many engineering professions. The construction, surveying, building technology, and architecture sector is particularly affected, with 306 job vacancies for every 100 unemployed individuals. This has replaced the energy and electrical engineering sector (271 job vacancies per 100 unemployed) as the leader in terms of skilled labor shortage.

The development is cause for concern: “This is partly due to the ongoing retirement of the baby boomer generation and partly due to declining student numbers and decreasing technical and mathematical competencies among students,” says Stindt.

Indeed, there is a clear downward trend in student numbers: between 2016 and 2023, the number of students in engineering sciences fell by over 11 percent.

A decline with far-reaching consequences. VDI Director Adrian Willig warns: “Infrastructure programs and especially the federal government's high-tech agenda require engineering and IT expertise. The looming shortage of skilled workers in these professions threatens implementation and thus the future of Germany as a technology location.”

Integration of foreign professionals as a lever

A key to addressing the shortage of skilled workers lies in the targeted recruitment and integration of foreign professionals. "Two factors are crucial: how attractive Germany is in international comparison, and how well integration succeeds in everyday life. Mentoring programs for foreign professionals, like VDI-Xpand, help with this. At the same time, bureaucratic hurdles must be reduced," explains Willig.

The numbers confirm the relevance of this lever: The proportion of foreign employees in engineering professions increased from 6 percent in 2012 to 11.4 percent in March 2025. This increase is particularly evident among professionals from India. Their number grew from 2,120 in 2012 to 13,997.

Employees from Turkey and Italy are also well represented. A successful example of integration can be seen in the Munich metropolitan area. Currently, 11,877 foreign professionals work in engineering professions here - the highest absolute number nationwide. The region particularly benefits from its innovative strength and high patent activity.

Securing young talent becomes a duty

In addition to the integration of international professionals, the VDI sees the education sector as responsible. To meet long-term demand, practical training and targeted promotion of young talent are needed - from kindergarten to further education.

In this context, girls and young women should be increasingly brought into focus. As part of the "Future Germany 2050" initiative, VDI published a position paper on education and qualification last fall. It presents 28 national and international best practice examples that demonstrate how educational strategies can be made future-proof.

With material from VDI