July 2018 Recruiting in Germany Bulletin
Listed Under: News & Bulletins
Recruiting in Germany Bulletin July 2018
Welcome to our July 2018 Recruiting in Germany Bulletin. This latest update indicates a continued demand for key skills in Germany, and we highlight some of the economic key trends leading commentators are predicting.
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Economic Commentary - what they are saying
GERMAN ECONOMIC INDICATORS in July 2018
A closely watched index of confidence among German business executives barely fell in July, suggesting that for now Europe's largest economy remains relatively unharmed by growing global conflict over trade.
The Ifo institute index fell to 101.7 points in July from 101.8 points in June. Therefore businesses are slightly more satisfied with how things are now, but less so about expectations for the months ahead, especially regarding trade problems with the USA.
In the light of this, it seems the German government is seeking to expand still further the trade ties with China, for example, to keep the economy on a stable footing. A recent German trade delegation to China with many top managers present showed the importance of the link to the Chinese market.
The Purchasing Managers Index (PMI) for factory activity moved to 57.3 in July from 55.9 in June, propelling a composite gauge for the country’s private sector to a five-month high after a sluggish start.
The International Monetary Fund has cut its 2018 forecast for German GDP growth to 2.2 per cent, saying rising protectionism on the part of the USA and the threat of a hard Brexit had exposed Germany's economy to significant short-term risks.
The German economy is however expected to be carried by a relatively healthy government consumption, private consumption and fixed investment.
Stronger wage growth should buttress household consumption. The oil price has somewhat steadied, avoiding at least for the short-term to a rise in inflation.
What might have a negative effect on inflation is the ongoing drought causing a rise in prices of certain food products. The current inflation rate is about 2% thus similar to June.
Germany exporting more than it imports is becoming a big problem for its economy, according to the Ifo Institute.
Germany’s export-orientated, manufacturing economy and its resulting trade surplus — the value of its exports exceeding that of its imports — has long been a subject of criticism and Berlin has been pressured to encourage more domestic spending and boost imports.
Germany's trade surplus with the U.S. stands at $ 64 billion, and such percieved trade in-balances represent a challenge for the German economy - as it becomes a focus of promised trade tariffs
The German Government
German Chancellor Angela Merkel recently seemed to reach a deal on immigration to end a four-week row which threatened to break up her four-month-old coalition government.
Home Secretary Horst Seehofer, who leads her Bavarian CSU allies, has now seemingly dropped his threat to resign. Mrs Merkel agreed to tighten some controls at the Austrian border. Mrs Merkel described the deal as a good compromise after a tough negotiation.
Many see the conservative leader as being weakened by this and by the lengthy negotiations to form a government and through her apparent lone and unsuccessful fight with other EU leaders to get them to open their borders to refugees, but her personal popularity remains still very high.
Also, with so much political uncertainty in Europe and beyond, many still see her as best placed to defend liberal democracy on the European continent.
Germany and the United Kingdom should "remain closely connected", even after the country leaves the EU. This was emphasised by Federal Chancellor Merkel during a visit by the British Prime Minister May in Berlin a couple of weeks ago.
Speaking in Buenos Aires at a meeting of the G20 Finance Ministers, Olaf Scholz said that it is "still on the agenda that the United States rolls back the steps it has already taken with tariffs". It is good, he added, that European Commission President Jean-Claude Juncker is flying to Washington with the aim of persuading the US government to change course in its trade policy. The German government is now in summer recess.
Compiled by SA July 2018 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.