Recruit Sales in Germany & Covid 19 Update Bulletin April 2021

Recruiting in Germany Bulletin

Welcome to this April 2021 Recruiting in Germany Bulletin.

A little context and background :

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.

Pre-pandemic 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 and headed up the European Parliament for the second half of 2020.

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 March/April 2021

German economic confidence improved in March, according to a survey reported data from the ZEW - Leibniz Centre for European Economic Research. The ZEW Indicator of Economic Sentiment rose 5.4 points to 76.6 points in March. The reading was above economists' forecast of 74.0. The current economic situation index climbed 6.2 points to -61.0 in March. The expected level was -62.0. 'Economic optimism continues to rise,' according to the ZEW President. 'Experts expect a broad-based recovery of the German economy. They anticipate that at least 70 per cent of the German population will be offered a vaccine against Covid-19 by autumn,“.

The IFO-Index showed that business confidence rose to 96.6 in March, the highest point since June 2019, from 92.7 in February. That said, the index remained below the neutral 100-threshold that separates pessimism from optimism.

The improvement in the headline reading came on the back of a return to optimism regarding business expectations and less downbeat views on the current situation.

Looking at sector-level data, manufacturing confidence rose further in the month, especially within the automotive industry, while sentiment in the services sector and construction swung from pessimism to optimism for the first time since October and September, respectively.

On the other hand, confidence in the trade sector remained in pessimistic territory although it recovered markedly from the prior month. This partly reflects the tough situation in retail amid lingering lockdown measures, which were recently extended until mid-April.

A leading analyst stated that If German authorities manage to get the vaccination programme moving, the second quarter could see an enormous turnaround in sentiment and lockdowns.

Germany’s private sector economy ended the first quarter of the year on a positive note, with the IHS Market composite Purchasing Managers’ Index rising to a 37-month high of 56.8 in March from 51.1 in February. Moreover, the index moved further north of the neutral 50-threshold that separates expansion from contraction in business conditions.

The key headline was driven by the steepest improvement in manufacturing business conditions on record. Rising new business in the manufacturing sector came in part on the back of strong external demand, particularly from Asia, Europe, and the United States, leading to record goods export orders growth.

The sustained upturn in the factory sector has seen the manufacturing PMI reach unprecedented heights, with growth in global demand for German goods showing no signs of abating and businesses reporting that previously delayed investments are now being realised. 

Focus Economics Consensus Forecast panellists expect gross fixed investment to expand to 3.9% in 2021. In 2022, the panel sees investment growth rising to 4.0%.

German Exports

Germany's exports growth accelerated at the start of the year despite lockdown restrictions.  Exports grew unexpectedly by 1.4 per cent month-on-month, faster than the 0.4 per cent rise in December. Economists had forecast a decline of 1.2 per cent.  

Strong external demand, particularly from Asia, Europe and the United States, lead to record export orders growth in the first quarter with the automotive industry doing particularly well, especially with growing order books from China for all German car manufacturers.

The Government

German Chancellor Angela Merkel criticised some regional coronavirus restrictions, expressing frustration with state governors who have resisted issuing tougher measures. Merkel also acknowledged in a lengthy interview with public broadcaster ARD on Sunday that mistakes were made by her government, including plans for a five-day Easter lockdown that she then backtracked on.

Merkel told ARD she stood by her goal to offer every adult a vaccine by the end of the summer. So far, just 10% of the population has received a first dose of the vaccine.

But Merkel said that compared to neighbours, the country was doing well. “We have a difficult situation," she said. “But look at our neighbours. Except for Denmark, they are all grappling with the same problems, in part from a much more difficult position.”

Germany’s ruling Christian Democrats (CDU) suffered stinging defeats in two state elections in March, presenting Angela Merkel’s party with a major setback just months before the country chooses her successor as chancellor.

According to initial projections by public broadcaster ARD, the conservative party posted its worst-ever results in both Baden-Württemberg, with about 24 per cent of the vote, and in Rhineland-Palatinate, with 26 per cent.

The CDU and its Bavarian CSU sister party have been hit in recent days by corruption allegations levelled at its lawmakers, who have been accused of profiting from public contracts for face masks.

The results in the two western states dealt a blow to new CDU leader Armin Laschet’s chances of securing the nod to be the centre-right candidate to succeed Merkel, who will end her 16-year tenure after a general election in September.

Compiled by SA in March  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