Recruit Sales in Germany Update Bulletin September 2021
Listed Under: News & Bulletins
Welcome to our September 2021 Recruiting in Germany Bulletin.
The economy of Germany is a highly developed social market economy. It has the largest national economy in Europe, the fourth-largest by nominal GDP in the world, and fifth by GDP. The country accounts for about 28% of the euro area economy according to the IMF.
In Germany, the share of industry in gross value added is 22.9 per cent, making it the highest among the G7 countries. The strongest sectors are vehicle construction, electrical industry, engineering, and the chemical industry.
Medium-sized enterprises form the heart of the German economy. In other words, companies with an annual turnover of fewer than 50 million euros and less than 500 employees. This sector of the economy embraces 99.6 per cent of German companies. More than 1,000 of these companies are so-called hidden champions, i.e., often publicly less well-known international market leaders.
Germany is the world’s premier location 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.
Germany is also a founding member of the European Union and the Eurozone.
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.
Economic Commentary - what they are saying
GERMAN ECONOMIC INDICATORS September 2021
The German economy expanded 1.6% on quarter in the second quarter of 2021, slightly more than 1.5% in the preliminary estimate, and rebounding from a downwardly revised 2% contraction in the first 3 months of the year, supported by private consumption and state spending after COVID-19 restrictions were eased.
GDP is expected to grow 3.7% this year, although it may miss full-year growth targets due to the coronavirus delta variant, according to the Bundesbank.
The ZEW Indicator of Economic Sentiment for Germany declined to 26.5 in September from 40.4 in August, and below market forecasts of 30. The gauge fell for the 4th consecutive month to the lowest since March 2020 when the coronavirus crisis started. The assessment of the economic situation in Germany however, increased to 31.9 from 29.3 in August. Current readings imply that over the next six months economic growth in Germany will only be slightly higher than its current rate.
Global chip shortage in the automobile sector leading to short time and production stoppages and shortage of building material in the construction sector have caused a significant reduction in profit expectations for these sectors”.
The automotive industry is the biggest manufacturing sector and by far the most important industrial sector in Germany in terms of turnover. Companies in this sector generate a turnover of some 436 billion euros and directly employ a total workforce of some 833,000.
Strong private spending in the last quarter has boosted retail and related services as well as the travel industry. Private consumption started to rise rapidly due in the main to the easing of lockdown restrictions.
The inflation rate in Germany, measured as the year-on-year change in the consumer price index, is expected to be around 3.8% or higher by the end of September, according to the German Federal Statistical Office. Inflation in Germany is driven by three factors: First, VAT returned to the previous rate of 19% as of January 2021 after having been reduced for a period of six months. VAT rates were temporarily lowered last year as a means of boosting purchasing power due to the impact of COVID.
Second, a carbon tax was introduced at the beginning of 2021. An amount of 25 euros per ton of carbon dioxide (CO2) is now levied on emissions of diesel, petrol, heating oil and natural gas. Consequently, heating costs, mineral oil and petrol prices have risen dramatically. Electricity is also very expensive compared to the EU average. Finally, following the end of lockdowns around the world, global demand and private consumption are pushing prices upwards.
The global economic recovery in 2021, mainly driven by China and the US is boosting the German export economy. To date, Germany exported goods valued at 118.7 billion euros and imported goods valued at 102.4 billion euros. While exports have nearly returned to pre-coronavirus pandemic levels, they exhibited strong growth of 23.6% compared to 2020; imports rose respectively by 27.0%.
Germany is still considered to be one of the most international economies in the world. Exports account for approx. 50% of annual GDP, making Germany one of the three largest trading nations in the world.
The Federal Cabinet has approved additional funds for the long-term reconstruction of regions affected by the floods. Following the delivery of emergency aid for victims of the flooding, up to 30 billion euros will be provided through the national solidarity fund.
Federal Chancellor Merkel opened the IAA Mobility 2021 in Munich. The trade fair showcases innovations geared towards climate-neutral mobility of the future. “Looking around here, I firmly believe that the transformation to climate neutrality will be a success for our country and our automotive industry”, she said. The annual IAA is organised by the German Association of the Automotive Industry (VDA).
The 2021 German federal election is to be held on 26 September to elect the members of the 20th Bundestag. Incumbent Chancellor Angela Merkel will not run in this election, marking the end of her 16-year reign.
With just over three weeks to go until Germany’s election, and with the three largest parties in a virtual dead heat, gauging the likely coalition options has become more complex than ever. Just a few weeks ago, the only question on most election watchers’ minds was whether the centre-right Christian Democrats (CDU) — who led the polls with as much as 29 % in mid-July — would form a two-way coalition with the Greens or need to bring in the conservative Free Democrats (FDP) to build a stable majority.
Since then, the Christian Democrats have suffered a collapse in the polls as their candidate, party leader Armin Laschet has been plagued by a series of strategic errors. As a result, pollsters say, the CDU appears to have lost around one-third of its voters, who supported the party because of Angela Merkel.
Since mid-July, the SPD has jumped 8 percentage points to 24 per cent while the CDU/CSU bloc has fallen 8 percentage points. Meanwhile, the Greens, who overtook the Christian Democrats for a brief period in April, rising as high as 25 per cent, have slumped back below the 20 per cent mark and are currently in third place.
The SPD’s surge is more the result of what its competitors have got wrong, rather than what it has got right. For the moment, the SPD is in a very comfortable position, provided these polling numbers remain stable and are reflected in the actual election results.
Compiled by SA in September 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