News

Migration is a fiercely contested area of public policy. Yet one aspect is often underestimated: the German labour market is undergoing a profound demographic transformation. Without immigration, the potential labour force would already be shrinking. “Skilled migration, successful integration and the resulting productivity gains are therefore becoming an issue for investors,” says Thorsten Fischer, Managing Director and Head of Portfolio Management at Moventum AM.

Long-term investors should pay just as much attention to major structural changes in the world of work as they do to developments in the financial markets. Demographics are becoming one of the most important drivers of growth, productivity and corporate earnings.

Germany’s Federal Employment Agency paints a clear picture: employment growth in Germany is now being driven entirely by foreign workers. Since 2024, the number of German employees has ceased to increase as a result of demographic change. Immigration is filling the gap.

This is not a temporary phenomenon; the underlying causes are structural and long term. An increasing number of people are leaving the labour market as they reach retirement age, while significantly fewer young workers are entering it. Between 2014 and 2024, the number of working-age people with German citizenship fell by around 3.9 million, while the number of working-age people with foreign citizenship rose by approximately 3.4 million. “Germany is therefore not facing a short-term shortage of skilled workers, but a long-term demographic transformation that will have a lasting impact on the economic environment,” Fischer explains.

The debate surrounding migration is often conducted in political terms. From an economic perspective, however, it is fundamentally a question of growth: who will work, produce, consume and pay taxes in the future? “Without international workers, it will be extremely difficult to maintain employment and economic output at today’s levels,” says Fischer.

This is particularly evident in shortage occupations, where vacancies are demonstrably difficult to fill because there are not enough suitably qualified workers available. These include, in particular, occupations in nursing and healthcare, construction and skilled trades, automotive engineering, education, IT, metalworking and hospitality, as well as HGV drivers and medical assistants.

In these sectors, the proportion of foreign employees has doubled since 2014, from around 7 per cent to approximately 14 per cent. “Labour migration is evolving from an option into an economic necessity,” says Fischer.

As a result, Germany is entering a global competition for talent, as other countries are also ageing and increasingly competing for skilled workers. “The challenge is increasingly about attracting international skilled workers and integrating them successfully,” Fischer emphasises. Key factors include the recognition of qualifications, language skills, access to the labour market and continuing professional development.

“The consequences of this development will become increasingly relevant in the coming years not only for companies,” says Fischer, “but also for investors.” If labour becomes the scarcest factor of production in many sectors, companies that are able to attract, retain and deploy talent productively will become increasingly valuable. From education and training to digitalisation, automation and productivity-enhancing technologies, the sectors that help to alleviate demographic pressures stand to benefit.

Investors should therefore look beyond short-term economic fluctuations and seek to understand the long-term changes that influence growth and corporate earnings. “Investors who recognise demographics, migration and productivity as key investment themes can identify opportunities before they become apparent to the broader market – and position their portfolios specifically for the structural changes that will shape our economy over the long term,” says Fischer. “We actively take these factors into account through global diversification, active management, a focus on long-term structural trends, and the ongoing analysis of economic changes and their impact on capital markets.”