Recruit Sales in Germany Update Bulletin March 2024

Recruiting in Germany Bulletin – March 2024

 

GERMAN ECONOMIC INDICATORS March 2024

After a recession in 2023, the outlook for 2024 is still very gloomy, especially when compared to recent years.

The German economy may see a little growth in 2024, but so far everything is pointing to a lacklustre year. Dynamic developments seem far out of reach.

Germany's gross domestic product fell by 0.3% in 2023 as a whole, and the German economy is only expected to grow by 0.2% in 2024, according to the German government's annual economic report forecast. There is currently no growth impetus coming from either Germany or abroad.

Private consumption and corporate investment in Germany also remain very subdued. 

Lower energy prices have pushed inflation in Germany to its lowest level in more than two and a half years. Consumer prices rose by just 2.5% in February 2024 compared to last year. This is the lowest level since June 2021, when it was 2.4%. In January 2024, inflation was still at 2.9% and in December 2023 at 3.7%.

Weak consumption and investment in Germany are partly due to inflation-induced losses in real income and declines in energy-intensive production.

However, concerns about the competitive strength of the German economy are also weighing on the willingness of private households and companies to spend money, which is not currently happening. People and companies are seemingly stockpiling and saving their money.

Numerous German companies are putting their investment plans on hold, or like BASF and Linde, they are building new production facilities abroad, where costs are less.

Finally, the ambitious green transformation of the German economy, driven by economics and climate minister, Robert Habeck, is currently taking up much of the investment opportunities the country is undertaking.

Cheaper energy was the main reason for the falling inflation rate in February 2024: it cost an average of 2.4% less than in February 2023. In addition, food no longer became as expensive. It only cost 0.9% more. Services were again 3.4% more expensive than a year earlier.

Core inflation - which excludes energy and food prices - also remained at 3.4%.

German Exports March 2024

German exports also remained at the previous year's level at the start of the year. Compared to January 2023, they only recorded a slight increase of 0.3% in January 2024. Considerable challenges in international trade remain because of increasing trade barriers and bureaucratic hurdles in the processing of foreign business.

The German Chamber of Industry and Commerce expects export growth of just +0.5% for 2024.

Due to the weak start to 2024, the mood in the German export industry also remains gloomy.

The monthly index for export expectations published by the ifo Institute rose only slightly from -8.5 points in January 2024 to a value of -7.0 points in February 2024.

This means that sentiment in February 2024 is as poor as in December 2023, when the value was -7.1 points. The last time there was a positive double-digit value was in February 2022 with +14.0 points, before the start of Russia's invasion of Ukraine.

Only a few sectors are expecting growth in exports, such as food producers or the electrical industry. In mechanical engineering, on the other hand, expectations fell to their lowest level since June 2020.

Employment March 2024

The number of unemployed people in Germany rose only slightly by around 8,000 to 2.814 million in February 2024 compared to the previous month. However, this is 194,000 more people than in February of the previous year. The unemployment rate was 6.1% in February 2024. In February 2023, on the other hand, it was still at 5.7%.

The weak economic environment is dampening the overall robust labour market. Unemployment is on the rise and demand for labour is declining.

Summary

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.

*Please note the information contained herein is an aggregate of news stories, by commentators widely available - readers should seek independent verification, and this in no way represents the views or opinions of Standley Associates.

We will continue to check the news reports and will provide monthly summaries of the trends

Some Facts about Germany 

• With a gross domestic product of 4,121 billion euros in 2023, Germany is the third largest economy in the world after the United States and China, making it the largest economy in Europe. Exports of motor vehicles and parts and chemical products in particular make Germany the third largest export nation in the world. At 70%, the service sector accounts for the largest share of the country's gross domestic product.
• Germany has a population of eighty-four million people.
• Germany is the seventh-largest country in Europe. Covering an area of 137,847 square miles, of which 34,836 square miles is covered by land and 3,011 square miles contains water.
• The economy of Germany is a highly developed social market economy. The country accounts for about 28% of the euro area economy according to the IMF. 
• Germany is one of the world’s premier locations for organising international trade fairs. Two-thirds of the major global industrial events take place in Germany. Ten million visitors attend around 150 international trade fairs and exhibitions each year.