Lunchtime in Salzgitter. But there don't seem to be many people doing lunch.

A local market does desultory trade, with its meats, flowers and fruits. A few people wander past, but they cannot alter the impression: this town may have bustled once, but not any more.

Scenes like this are becoming more and more common in Germany's former west as industries wind back production and jobs become scarcer, forcing people to move away from towns and to cities to find work.

"Lots of people have moved away, lots of young people because there is not much work here," said Sabine Schübbe, 48, who was born in the town but expects her teenage children to move away soon. "The steel works is not taking people any more – many of the small companies have shut down. There is nothing here for the young people."

Founded during the second world war in 1942 to house workers from the nearby Hermann Göring steel works – and originally slated to be named after the Nazi air force leader before the failure of the Luftwaffe during the Battle of Britain – Salzgitter has seen a decline in population over recent years.

The number of people living in Salzgitter reached almost 103,500 in 2009, and fell to 101,750 in 2011, according to Germany's federal statistics office. Analysts say it could fall further, forecasting a 9.2% drop by 2030.

The drop in population has led to houses being left empty and shops abandoned, say residents.

"If there are no jobs, there are no homes, and if it keeps going on, soon there won't be a town any more," said 78-year-old Herbert Haschke, a pensioner who has lived in the town since 1962. "All the young people go; we soon-to-be worm-fodder stay."

Shrinking cities, a phenomenon thought to be confined to the states that made up former East Germany, is increasingly plaguing former western states. Demographers say that among the places worst hit by the phenomenon are cities in Saarland, Lower Saxony, and Germany's most populous state, North Rhine-Westphalia.

"It's something that happened early in the east – a lot of people migrated to the west," said Daniel Schiller, an economist at the Lower Saxony Institute for Economic Research (NIW) in Hanover. "But now more and more regions and cities in western Germany are being affected by the fact that the population is getting older and the birthrate is not high enough to replace the population."

Germany has one of the lowest birthrates in Europe, with just 1.36 children born per woman. It is a trend that is leading to an ageing population, one that is likely to decrease from 2012's figure of 80.5 million inhabitants, according to 2012 figures, to around 65 million by 2060.

Because of this decline, Germany also faces growing pension and healthcare costs in the future.

The issue has played little role in this election campaign, however – something analysts put down to a reluctance among politicians to tell "hard truths" to voters.

"With shrinking populations, you have to reduce infrastructure, not build new schools, roads and sewerage systems," said Schiller. "I think it is something politicians know, but don't want to talk about. Nobody wants to hear that in certain regions infrastructure won't be maintained."

Others say Germany should act quickly to ensure it does not become full of ghost towns.

"Some cities are not so far from the example of Detroit," said Michael Voigtländer, a senior economist at the Institute for German Economy in Cologne. "You have to act early, if possible by tearing down empty buildings and developing so that the city grows inward, and think about what to do with the new space."

All the same, Salzgitter's lord mayor, Frank Klingebiel, is not ready to declare his town dead just yet. He believes people will stop leaving if the infrastructure here is upgraded. The town's demographic problems, he says, can be solved through better schools and facilities for young people, and more benefits for people who choose to start families.

"We have to put in money for the future," he said. "We are specialising in education, family and children. We have to do something special about this problem so the town is more attractive."