April 2020 Recruiting in Germany Bulletin
Listed Under: News & Bulletins
April 2020 Recruiting in Germany Update
At these difficult times, we have collated some of the reports and news summary’s to give an outline assessment of the current economic & political climate throughout Germany. Naturally different regions within Germany have been impacted in their own way however we hope this helps build a snapshot.
What they are saying:
The economic barometer of the German Institute for Economic Research (DIW Berlin) collapsed to 86 points in March, indicating a significant decline in economic output in the first quarter of 2020 after a better start to the year.
This showed the massive effects of the corona pandemic, which can be seen in the indicators now available on developments in the financial markets and in company surveys.
In manufacturing, the index has dropped to its lowest level since August 2009. There has never been a stronger decline in reunified Germany. The automotive market both in manufacturing and retail has been hit hard as have exports and trade in general.
Wholesale and retail to include gastronomy and hospitality have been equally badly hit. Positive exceptions are food retailing which has seen Christmas like increases in trade and drugstores. That said this reflects what other countries in Europe are also seeing.
Other data, such as the order situation or production output, do not yet reflect the current situation. The fact that production has virtually completely come to a standstill in some economic sectors especially the car industry and heavy industry is not yet fully recorded in the current barometer value.
Additional estimates of the loss of production and demand suggest a significant decline in economic output going into the second quarter: it is expected to fall by at least 2.0 per cent quarterly, and thus somewhat more than at the start of the financial crisis in 2008.
The restrictions in public life - including school closings, ban on visits to bars and restaurants or the loss of sports, entertainment and cultural activities - will continue to weigh on added value in April. Initial estimates suggest that the decline in economic output will be even more drastic in the second quarter - the minus could be almost double-digit.
The economic development for the year as a whole is currently very difficult to estimate since it depends to a large extent on the further spread of the virus and the political reactions to it.
At present, the available data paint an extremely incomplete picture of the situation. Even if more and more economic activity becomes possible in the coming weeks and normalisation will follow in the next few months, the economic output should decline by around six per cent by the end of the year.
However, there are reasons to believe that Germany could be turning the corner.
The German stock market to include the DAX 30 has stabilised in the last week and the number and doubling of new virus cases are slowing down, coupled with a still very low death rate.
This is down to several factors, to include continued mass testing which started at a very early stage, the solid and well-prepared health care system, the discipline of the German people and Angela Merkel.
It was widely accepted in Germany that Merkel communicated clearly, calmly and regularly when she imposed ever stricter social distance measures on the country. The restrictions met with little political resistance and have largely been followed.
The chancellor's approval rates have risen rapidly in the past few weeks. It is thought that this is being seen as the first time in a while she has demonstrated clear and calm leadership in a crisis, despite being in isolation herself.
A leading journalist has written, perhaps one of the greatest strengths in Germany “ is the rational decision-making at the highest government level combined with the government's trust in the population to carry out its wishes, which by and large is happening right across the country.”
Compiled by SA in April 2020 from various news sources
*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.