German unemployment falls for the first time in 15 months

The number of people out of work in Germany fell for the first time in 15 months in March, offering a ray of hope after a spate of high-profile corporate failures.

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Manufacturers take first small steps out of recession

The number of people out of work in Germany fell for the first time in 15 months in March, offering a ray of hope after a spate of high-profile corporate failures.

Unemployment fell by 8,000 to 3.968 million, according to seasonally adjusted figures from the Federal Labour Office.

The more politically sensitive headline figure fell 140,000 to 4.156 million, or 9.6 per cent of the workforce.

The news came as a political boon to Chancellor Gerhard Schröder who has asked voters to judge him in September's election on his record on fighting unemployment.

A spokesman for his Social Democrat party yesterday claimed the fall in the jobless total was due to government policies getting the unemployed back into work.

Mr Schröder had promised to cut unemployment to 3.5 million, but he revised the forecast, saying the global economic slowdown put that out of reach.

The good economic news comes after a string of high-profile insolvencies that threaten to push the jobless total back up.

As many as 4,000 employers at KirchMedia, part of the giant Kirch group that has links with Mr Schröder's conservative rival Edmund Stoiber, could lose their jobs after it went into insolvency.

KirchMedia's collapse followed recent insolvencies of the building company Philip Holzmann, which employs some 11,000 in Germany, and the stationery products maker Herlitz, which has 3,000 workers.

Meanwhile new car sales in Germany fell 7 per cent in March from a year ago due to rising fuel prices and fewer working days, the country's car maker association said yesterday.