July 2019 Recruiting in Germany Bulletin

July 2019 Recruiting in Germany Bulletin

Recruiting in Germany Bulletin

Welcome to our July 2019 Recruiting in Germany Bulletin. This latest update highlights some of the economic key trends. 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 July 2019

Observers have noted that the economic mood in Germany has somewhat cooled further this month. The Ifo Business Climate Index fell from 97.9 to 97.4 points which is the lowest level since November 2014 with companies becoming increasingly pessimistic about the coming months. Their current situation, however, they estimated a little better. Commentators are saying that the German economy continues to slow down, albeit slowly.

The situation for German exports has also seemingly worsened. The Ifo export expectations for the industry fell to 0.0 balance points, from 0.9 balance points the month before. The companies contacted were expecting no more growth in exports at the present time due in part to the global trade dispute between the USA and China, where there is still no definite end in sight, although more positive noises have seemingly been made.

Germany's Manufacturing PMI (Manufacturing PMI) measures the situation in the industry. In the financial markets, this survey of purchasing managers and CEOs is considered to be one of the most influential economic indicators. Index values above 50 indicate a positive business performance of service providers compared to the previous month, while in a case below 50, a negative business development is to be expected. In July the figure came in at 45 indicating the continuing negative trend.

Motor car production is the biggest industry in Germany. However, the industry is facing its biggest crisis in decades. A Chinese slowdown, a hard Brexit, possible US tariffs, and massive technological challenges could become a perfect storm engulfing Volkswagen, BMW and Daimler, the maker of Mercedes-Benz luxury cars. Since car manufacturing is crucial to the economy, this could be concerning news.

On July 3, the Germany Federal Motor Vehicle Office (KBA) announced that there were 325,231 new passenger car registrations in June, a 4.7% decrease from the same month last year. Year-to-date sales increased by 0.5% with 1,849,000 passenger cars registered in the first half of 2019.

The inflation rate in Germany is steady at 1.4% due in the main to lower than expected oil prices. Consumer prices are set to rise by 0.2 %.

German Government news

The EU heads of state and government have nominated Germany’s Federal Defence Minister Ursula von der Leyen for the post of President of the European Commission. Decisions were also taken on the other top EU jobs. "We have a good top team and have attached a great deal of importance to ensuring the EU’s ability to act," said Chancellor Angela Merkel.

"The best way to address housing shortages is to create new housing," said Chancellor Angela Merkel at the annual meeting of the DMB (German Tenants’ Association). The German government is standing by its target of creating 350,000 new housing units a year. At the same time, the Chancellor advocated stronger action against exorbitant rents and exploding rental prices. It has also been suggested that rent prices should be frozen for a year in major cities like Berlin.

Germany's Green party may be leading the country's two traditional main parties for the first time, according to a very recent national poll. The poll suggested they had moved ahead of the ruling Christan Democrats (CDU) and coalition partner the Social Democrats with 27 per cent of voter intentions.

It came just a week after the party unexpectedly came second in the European elections, with 20.5 per cent of the vote. This poll puts the Greens nine points up, with the Christian Democrats and their Bavarian regional partner CSU down two points at 26 per cent. Chancellor Angela Merkel's CDU was the largest party in the EU polls, but on 28.9 per cent which was their worst-ever rating in a national election.

The SPD, an unhappy partner in the national government, and two years out from the next scheduled general elections was down five points down in the latest poll at just 12 per cent. In the EU vote, the SPD obtained 15.8 per cent. The opinion poll also showed the extreme right AfD moving to within one point of the SPD on 11 points, which is what they scored in the European elections.

To counter-act US tariffs and the threat posed by the US-Chinese trade war the German Government has taken measures to increase trade with key players in South America like Brazil and Chile.

Compiled by SA in July 2019 from various news sources

*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.