Upturn for Germany's Top Companies Fails to Boost Employment

Germany's economic performance is too weak to boost employment despite strong showings from some of the country's top companies.

Unemployment is at almost 4.4 million, according to figures released yesterday, while the latest survey suggests a third of German workers are worried about keeping their jobs.

Corporate Germany, however, is showing signs of an upturn, with BASF, the world's biggest chemicals company, and BMW reporting sparkling figures yesterday. "All signs suggest the German economy is recovering. But this isn't yet having an effect on the labour market," the labour office acknowledged.

BASF said that second-quarter profits rose by almost half to €1.2bn (£790,000) as it was able to pass on to its customers some of the price increases in oil-related raw materials. Sales were up 13% to €9.3bn. BMW confirmed it is on course for record profits this year after making more than €1bn in the second quarter.

Despite the brighter outlook on the corporate front, economists said a pick-up in the labour market was months away. "What we are seeing at the moment is a classic jobless recovery. The jobs market is the achilles heel of the upswing," said Andreas Rees of HVB Bank.