Recruit Sales in Germany Update Bulletin February 2022
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Recruiting in Germany Bulletin
Welcome to our February 2022 Recruiting in Germany Bulletin.
GERMAN ECONOMIC INDICATORS February 2022
The GfK consumer climate index is forecast to inch up to minus 6.7 in February from minus 6.9 in January, on the back of easing Omicron fears and an anticipated easing of the pandemic and associated restrictions going into the spring.
Moreover, from January 2022 a broad-based improvement occurred moving into February. Economic expectations rose notably as consumers anticipated that the German economy will grow at an accelerated rate this year. Consequently, income expectations also improved despite elevated price pressures; consumers expect the rate of inflation to ease this year from its present high of over 4.5% and anticipate wage growth to keep pace with inflation.
The labour market is very tight and certain sectors are experiencing a shortage of skilled workers, for example gastronomy, logistics and transport.
Consumers’ propensity to buy also rose on the back of a general improvement in sentiment. However, the coronavirus restrictions and high inflation due in part to rising food and petrol prices (carbon tax increase), internal VAT changes, energy costs and private consumption continue to weigh on spending propensity.
Retail sales have taken a hammering over the past quarters, in stark contrast to online sales which have boomed, above all in consumer electronics and clothing.
Analysts expect private consumption to expand 6.0% in 2022.
The Ifo Business Climate Index rose to 95.7 in January from December’s nine-month low of 94.8. However, the index remained entrenched below the neutral 100-threshold that separates pessimism from optimism among German firms. However, many of the top companies listed on the German Stock market (DAX 40) had better than expected final quarters in 2021, boding well for 2022 moving forward.
“The unexpected rise in the January Ifo business climate index shows that German companies are increasingly looking through omicron. This supports analysts forecast that the German economy will recover strongly from early summer 2022 after a Corona-induced contraction in the winter half-year. The order books in the manufacturing sector are fuller than at any time since the statistics began in the early 1960s.”
Looking at the services sector, sentiment rose for the first time in four months, and pessimism disappeared regarding expectations. Moreover, tourism is anticipating a promising summer. This is aided by the less severe impact of Omicron.
German exports increased for the third consecutive month in December, capping a year in which they rose 14% compared with 2020. For 2021 as a whole, exports rose 14% to some 1.38 trillion euros.
The United States remained Germany’s top export destination, with China second and France third.
The order books are full moving into the first quarter 2022 However, analysts are saying the country will first need to see industry production picking up significantly again before exports surge as well. However, the signs are good.
Federal Chancellor Olaf Scholz met with US President Joe Biden on his inaugural visit to the American capital Washington, D.C. on Monday. The talks focused on the Ukraine crisis. The Federal Chancellor and the US President also discussed the priorities of Germany’s G7 Presidency.
Compiled by SA in December 2021 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