Recruit Sales in Germany Update Bulletin January 2023
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Recruiting in Germany Bulletin
Welcome to our January 2023 Recruiting in Germany Bulletin.
GERMAN ECONOMIC INDICATORS January 2023
What they are saying
While the German economy is likely to contract in the current winter half-year, it most likely will not experience a severe downturn. Due to additional gas imports from other countries as well as reduced consumption, a gas shortage is looking more unlikely to occur despite the cessation of deliveries from Russia.
However, the energy crisis is likely to boost inflation. As a result, real disposable income and household consumption will fall until mid-2023. High energy costs will weigh on production, especially in energy-intensive industries (Steel as an example). This is expected to dampen exports.
From the second half of 2023 onwards, it is being widely predicted the German economy will gradually recover. This is because foreign demand is expected to rise, uncertainty will abate, price pressures from energy commodities will diminish, and inflation rate is expected to fall. As the labour market remains robust and wages will see strong growth, real household income and private consumption should well increase again moving forward.
That said, four out of ten German companies surveyed expect business to shrink in 2023, a survey by the German Economic Institute (IW) showed, blaming high energy costs, supply chain issues and the continuing war in Ukraine.
The outlook is particularly bleak in the construction sector, where more than half of companies surveyed by IW expect a decline in production and just 15% anticipate more business.
The picture is barely brighter in industry, where 39% of surveyed companies forecast a decline, driven by a cautious assessment in the consumer and basic industries.
German Exports 2022
Exports grew 13.3% year-on-year to reach a record high of €142.8 billion in 2022. Sales fell 0.4% to the EU while those to countries outside the EU inched down 0.1%, namely the US (-1.5%), and China (-1.5%). On the other hand, shipments to the UK surprisingly surged 16.1% and also to Russia 12.3% despite sanctions.
Car exports from Germany increased by 10% to 2.6 million vehicles exported in 2022.
Germany exported more electricity to its neighbours than it imported in 2022, even with an energy crisis at home, thanks to more weather-driven renewable power and greater demand from France.
While Switzerland and Austria were the main export destinations, in a notable shift Germany exported more to France than it imported as the nuclear-reliant country grappled with technical problems at its reactors that curtailed production.
Employment and Salaries 2022/3
There were some 45.6 million persons in employment in 2022. This was a record high since German unification in 1990. According to provisional calculations of the Federal Statistical Office (Destatis), in 2022 the average number of persons in employment rose strongly by 589,000 (+1.3%) on the previous year. The average salary for jobs in Germany is 49.010 € per year or an hourly rate of twenty-four €. High inflation led to a 5.7% decrease in real earnings in the third and fourth quarter of 2022. The index of nominal earnings was up 2.3% in the third quarter of 2022 on a year earlier according. To provisional results of the new earnings survey but consumer prices rose 8.4% in the same period.
Compiled by SA in January 2023 from various public and widely available news sources and articles.
*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