Recruiting in Germany Bulletin August 2017
Listed Under: News & Bulletins
Recruiting in Germany Bulletin
Welcome to our August 2017 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 AUGUST 2017
With the diminishing potential for too much political uncertainty ahead within Germany, it appears economic growth is expected to be broad-based and strong.
A tighter labour market is expected to push up wages, which should keep household consumption growing apace. The external sector seems also to be continuing to provide solid support to growth. GDP seems likely to grow to 1.9% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, the panel is currently predicting GDP growth of 1.8%.
Manufacturing output and new orders accelerated in August. Underlying economic growth seems to remain strong following a slight correction and also despite the strength of the Euro.
Still, a big issue is the acute shortage of skilled labour across markets, which has become an election issue but which successive governments have never really addressed. Medium-sized companies especially in the manufacturing sector are especially feeling the effects of this.
The inflation rate in Germany as measured by the consumer price index (CPI) is expected to be 1.8%. This figure could be influenced further in a negative sense by the price for Oil which has been rising steadily over the past few months. Based on the results available so far, the consumer prices are expected to increase by 0.1% on July 2017.
Germany's exports seem to be suffering somewhat at present after the surge of the euro reached a two and a half year high against the US dollar thus putting pressure on profit margins.
The German economy is currently largely driven by overseas sales, particularly from the car industry. The automotive market in China is still very buoyant for German car manufacturers but in a double blow to the sector, the top car manufacturers are being investigated for collusion over the diesel-emissions scandal and price fixing, which the monopolies commission is investigating. The scandal surrounding Volkswagen has spread. Heavy fines are expected for some.
The economic outlook remains however relatively stable and at a fairly high level on the back of record exports for the last seven years in a row and very low unemployment.
ELECTION IN GERMANY in 2017
Germans will be heading to the polls on 24 September to elect a new government after a campaign that has been described as predictable and lacking in-depth policy discussion on key issues.
At the time of writing, Angela Merkel’s ruling Christian Democratic Union (CDU/CSU) is currently leading the polls with 38–40% of a possible vote, almost guaranteeing a stable and market-friendly outcome. The SPD seems to be falling behind and as things stand may only get just above 20% of the vote. The seemingly lack lustre election campaign with few strong political personalities and weak policies seem likely to favour Merkel and her solid stance.
Many commentators are saying the election campaign seems to have solidified Merkel as an unstoppable figure in Germany’s political landscape. She has deftly navigated the challenges from the opposition, while framing herself as a safe choice in an age of uncertainty who managed to preside over an economic success story and is therefore currently looking good for a fourth term in office, probably a lot of commentators predict in a coalition with the Liberal FDP.