December 2018 Recruiting in Germany Bulletin

Recruiting in Germany Bulletin December 2018 

Welcome to our December 2018 Recruiting in Germany Bulletin. This latest update indicates a slowdown in general business confidence going into 2019 but the job market for key skills in Germany, should nevertheless remain robust.

Also, it appears Germany is still a strong market for foreign investors with many foreign companies still looking to expand their businesses here.

Therefore, 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 in December 2018

Concern seems to be growing among some German businesses. The ifo Business Climate Index fell to 101.0 points in December from 102.0 points in November. it seems companies were less satisfied with their current business situation. Their business expectations also continued to deteriorate.

Therefore perhaps the German economy faces a lean festive season, due mainly to a number of external political and economic factors.

Especially in manufacturing the business climate index fell markedly. This was primarily due to manufacturers’ business expectations, which turned negative for the first time since May 2016. In line with these developments, manufacturers in some markets have scaled back their production plans. Their assessments of the current business situation also deteriorated slightly, but nevertheless remain at a high level.

Economic growth is projected to decline but remain solid, backed by strong job creation and a fiscal stimulus. Trade-related uncertainties and moderating world demand will weigh on exports. Private consumption will accelerate due to strong wage growth and fiscal measures that increase household disposable income. Low interest rates, high capacity utilisation and growing housing demand will support residential and business investment. The current account surplus will fall as stronger domestic demand fuels imports. 

It seems strong cyclical revenue growth is likely to keep the fiscal balance in surplus. There is a perception amongst economic & political commentators that this fiscal space should be used to increase spending on education, high-speed broadband and low-emission transport infrastructure, which would strengthen productivity growth and inclusiveness.

Tax reductions for low-wage and second earners along with higher environmental and real estate taxes are trying to promote greener and more inclusive growth. Strengthening lifelong learning would help workers cope with technological changes and prepare for the future of work.

In construction the business climate index remained at Novembers very high level. Contractors assessed their current business situation slightly more favourably, but their expectations have declined somewhat moving forward.

While trade and industry representatives remain cautious, it is worth pointing out that the German economy is still growing and is now in its ninth straight year of expansion — so not necessarily a huge cause for major concern, when compared to other regions.

German Exports

The US-China trade conflict, as well as ongoing tensions over trade between the US and the EU, have seemingly affected Germany's strong export sector throughout 2018. In November, German exports fell by 0.8 percent, with many analysts expecting the final quarter of the year to show similar headwinds for German exporters.

The German economy however, long powered by its dominant export sector, still commands a trade surplus, but the surprisingly strong import figures have dented that surplus to the tune of almost €1 billion in terms of year-on-year figures.

While fears over the capacity of its export-oriented economy to handle an escalation of global trade tensions are rife, the latest figures suggest the storm is still quite a way from making a landfall. As well as that, the sharp increase in imports suggests strong domestic demand — a key requirement needed to offset any prolonged export difficulties.

The German Government

The German government has decided to lower the barriers and allow more skilled workers to come to Germany. The Act on Skilled Worker Immigration will make it easier for skilled workers from non-EU states to come to Germany in future. This is one building brick in efforts to alleviate Germany’s shortfall of skilled workers.

The Cabinet has adopted more bills to cushion the impact of Brexit. They include transitional labour and social insurance regulations. A Tax Accompanying Act is to protect companies in the financial sector from undesirable legal consequences and adverse impacts.

German citizens living and working in the UK and British citizens living and working in Germany on 30 March 2019 are being told they are likely to retain their social insurance protection: health insurance, nursing care insurance, unemployment insurance, old age pension insurance and accident insurance – even in the case of a no-deal Brexit.

 

***Compiled from various international news sources.

Disclaimer :The information included above is aggregated from various news sources and this document provides very basic and general information and should not be read as legal advice. The accuracy of the data cannot be verified. This is particularly so as each case hinges on its own merits