On Wednesday, Bloomberg reported that, according to a new report from the German Ifo Institute for Economic Research, hiring in Germany has stalled as the economic environment has worsened and the nation continues to struggle through an energy crisis and soaring borrowing costs.

This month, a measure reflecting hiring activity fell to its lowest level since February 2021 as construction companies and manufacturers are rethinking whether they want to hire new staff, according to the study.

Klaus Wohlrabe, head of surveys at Ifo said, “The robust expansion of employment seen over the past few months has come to a standstill. Due to a lack of orders, companies are being rather cautious about filling vacant positions.”

Economists say the German labor market is beginning to falter in what has so far appeared a “very resilient” environment, and as overall economic activity weakens, the jobs market is losing steam. Until the economy recovers unemployment is expected to further increase, according to experts.

Wohlrabe said, “Companies’ willingness to hire new staff will presumably rise again once the economy recovers. In the medium term, demographic change will deprive the labor market of more and more workers.”

Meanwhile, a separate survey of purchasing managers released last week showed that hiring in the largest economy in the EU fell for the first time in almost three years. The report came as business and industry have grown increasingly pessimistic over Germany’s economic outlook as the economy is faltering off weaker external demand and a lack of orders, as well as tighter monetary policy and a shortage of skilled workers.

In the first quarter of the year the German economy officially fell into a technical recession following a 0.3% contraction. The nation’s GDP is expected to fall by another 0.5% by the end of the year.