Recruiting in Germany Bulletin February 2017

Recruiting in Germany Bulletin 02.2017

Welcome to our February 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.

Economic Commentary - what they are saying

GERMAN ECONOMIC INDICATORS IN JANUARY 2017

Inflation rose in Germany from 1.7% in December 2016 to 1.9% in January 2017. This continued rise is likely to trigger an increase in interest-rates later in 2017.

The unemployment rate in Germany rose by 209,000 from 5.8% in December 2016 to 6.2% in January 2017. This increase is largely attributed to seasonal fluctuation because looking at the year on year figures unemployment fell by 143,000 thereby again reaching unemployment figures not seen since 1991. Unemployment figures have been continually falling for years in Germany.

The German (Industrial) Purchasing Managers' Index (PMI) further rose from 55.5 points in December 2016 to 56.5 points in January 2017 thereby marking a 36-months high (April 2014). In a somewhat inexplicable contrast to the aforementioned positive figures, the IFO business climate index rather unexpectedly weakened in January and dropped to 109.8 points after reaching a new high with 111.0 points in December 2016

The ZEW current economic sentiment indicator, on the other hand, rose from 63.5 points in December 2016 to 77.3 points in January 2017 thereby marking a record-high not reached since 2011.

Insolvencies of German companies fell also and continue to fall indicating better all-around trading conditions and on-going business confidence.

GERMAN EXPORTS

German exports started the year in a very optimistic mood, boosted by sales in motor cars and mechanical engineering. Companies in the chemical and electrical sectors also did very well. Export expectations rose from 8.2 points in December to 12.0 in January 2017.

THE CONSUMER

Consumer confidence, however, fell slightly in January compared to December 2016. This has been put down to lack of confidence in the policies and statements coming out of the United States of America. However, according to the GfK, consumer confidence is still high and should remain so in the months ahead.

All in all its business as usual with the outlook for the German Economy looking positive moving forward.

ELECTION IN GERMANY in 2017

The federal election in Germany will take place on Sunday, September 24. The latest poll conducted by ARD state television shows that the Christian Democratic party of Angela Merkel is still well ahead with 37% support. The Social Democrats with their new leader Martin Schulz are trailing behind with 20%

Uncertain is how the AfD – the far-right party – will fare in the election. Internal bickering and a sacking of one member is not helping its cause. It is still believed though that the AfD will get about 15% of the vote and therefore seats in Parliament. It is unlikely though that any of the other parties will want the AfD as part of a greater coalition.

Compiled February 2017 *