February 2019 Recruiting in Germany Bulletin

Recruiting in Germany Bulletin

Welcome to our February 2019 Recruiting in Germany Bulletin. This latest update indicates a slowdown in general business confidence going into February but the job market for key skills in Germany, should nevertheless remain robust. Also, Germany is still a strong market for foreign investors with many foreign companies still looking to expand their businesses here.

Therefore, if you are looking to recruit experienced sales staff to enable you to exploit new or existing markets within Germany, the UK, Europe or further afield, please call us for a no-obligation discussion.

Economic Commentary - what they are saying *

GERMAN ECONOMIC INDICATORS in February 2019

It is thought that a solid domestic demand on the back of a boost in private and public consumption is expected to drive the 2019 economy. Private expenditure could well benefit from the increase to the minimum wage and a tightening labour market. Consumer confidence opened the year on a stronger note than previously estimated, with the GfK Group Consumer Climate index revised upwards from 10.4 to 10.5 in January.

it must be said however, that varying market climate conditions including a potential "no-deal" Brexit and lingering trade tensions between the EU and the United States, the United States and China as well as a Chinese slowdown, pose downside risks.

The fourth consecutive decline in business confidence saw sentiment drop to 99.1 in January—the lowest reading in nearly three years—from 101.0 in December. For these reasons the economy is expected to expand 1.4% in 2019, down 0.2 percentage points from the December 2018 forecast, and 1.5% in 2020.

The Purchasing Managers’ Index (PMI) opened the new year however on a more positive note, rising from 51.6 in December—a 66-month low—to 52.1 in January. The index thus remained above the 50-point mark that separates expansion from contraction in Germany’s private sector and the improvement indicated quicker growth in private sector business activity. On a less positive note, the improvement was solely driven by the services sector, with operating conditions in the manufacturing sector worsening.

The downturn in the manufacturing sector, which registered the lowest reading in 50 months, came on the tails of a confluence of factors: the weakest increase in output since the survey began; the first drop in inflows of new business in over four years, as order books contracted for the fourth month running; softening foreign demand, particularly from China; increased uncertainty; and ongoing weakness in the automotive sector, with new car registrations continuing to contract at a marked pace in the fourth quarter. Daimler registered a third less profit for 2018 than in 2017 confirming the above slowdown, which has also hit Ford in Germany.

Germany's inflation rate eased to 1.4 percent in January 2019 from 1.7 percent in the previous month and below market expectations of 1.6 percent, partly due to low oil prices.

German Exports

The US-China trade conflict, as well as ongoing tensions over trade between the US and the EU, and the looming possibility of a no-deal Brexit have affected Germany's strong export sector throughout 2018 and going into 2019. In January German exports were expected to fall by 0.7 percent over December which also noted a decline.

The German economy however, long powered by its dominant export sector, still commands a trade surplus, but the surprisingly strong import figures have dented that surplus to the tune of almost €1 billion in terms of year-on-year figures.

To offset the fears of continued trade wars the EU and Japan have forged an Economic Partnership Agreement which entered into force on 1 February 2019. EU firms already export over €58bn in goods and €28bn in services to Japan every year.In the past European firms faced trade barriers when exporting to Japan, which made it hard for them to compete

The trade agreement with Japan removes these barriers and helps shape global trade rules and most importantly sends a powerful signal that two of the world's biggest economies reject (US) protectionism.

The German Government

A new, higher level of Japanese-German relations – that is the outcome of the Chancellor’s two-day visit to Japan. At a meeting with Japan’s Prime Minister Shinzo Abe, the Chancellor announced that their common commitment to international free trade and multilateralism would be extended, and trade stepped up.

At the World Economic Forum which has recently taken place in in Davos, Switzerland, Chancellor Angela Merkel spoke out against national egotism and advocated compromises for the good of all. This, she said, produces win-win situations. Germany is looking for like-minded partners to work for multilateralism and has found two, namely Japan and Canada.

In view of Germany’s plans to end the use of coal, gas will play a more important part in the decades to come, said Angela Merkel. Germany will continue to import gas from Russia, but possibly also from the USA and other countries.
 

* Compiled from various open news sources. 

Disclaimer :The information included above is aggregated from various news sources and this document provides very basic and general information and should not be read as legal advice. The accuracy of the data cannot be verified. This is particularly so as each case hinges on its own merits