Recruit Sales in Germany Covid -19 Bulletin February 2021

Recruiting Sales in Germany Bulletin

Welcome to our February 2021 Recruiting in Germany Bulletin. If you are looking to recruit experienced sales staff and sales leaders to enable you to exploit new or existing markets within Germany, the UK, Europe or further afield, please contact us for a no-obligation discussion.

Economic Commentary - what they are saying: 

GERMAN ECONOMIC INDICATORS in February 2021

The mood among German managers has seemingly improved dramatically in February 2021 moving forward, boosted by the pending vaccination programme. Currently in Germany the vaccination rate is comparable to other EU countries at 6.41 per 100, but this is still someway behind the UK which is at present 27.34 per 100. 

The plan however is for this to be ramped up significantly over coming months, helping boost business confidence. 

The IFO business climate index rose to 92.4 points in February, after 90.3 points (seasonally adjusted) in January. The assessments of the current business situation were more positive. Also, the pessimistic voices have seemingly become less prominent about the coming months business outlook.

As with other European countries, the lock-down in Germany has been hitting individual industries hard, especially the restaurant, hotel, travel, tourism and retail sectors.

However, the flip side is that some service industries such as postal services and online retail have increased their business activities due to the lock-down. Online retail sales have significantly grown in the past year as have food home delivery services, this is in Germany quite a change from the more traditional retail offer.

There has been a surge in demand for exports which pushed activity in Germany's manufacturing sector to a 36-month high in February. However lock-down measures to contain the coronavirus pandemic pushed the services sector into a deeper contraction.

IHS Markit's flash purchasing managers' index (PMI) of activity in the manufacturing sector rose to 60.6 this month from 57.1 in January, confounding the forecast for a fall to 56.5.

The rebound in demand from China, probably increased as a reduction in the tensions around the US/China trade dispute could have had a massive impact on the data. Especially German car sales to China, notably from Daimler (Mercedes Benz), have increased robustly in the past months.

Investor morale in Germany rose beyond even the most optimistic forecast in February on expectations consumption will take off in the coming months, the ZEW economic research institute stated, buoying the outlook for Europe's largest economy. 

The ZEW said its survey of investors' economic sentiment showed a rise to 71.2 points from 61.8 the previous month. A Reuters poll had pointed to a fall to 59.6, and the February reading surpassed even the highest forecast, of 68. The German economy as a whole is showing signs of being resilient, despite the tough trading conditions.

Nevertheless, economic output is expected to slump by 5.1 per cent in 2021 overall. For the remainder of the forecast period, it has been assumed that the infection control measures in place since November will remain in force unchanged until March 2021 and will then be gradually eased. Against this background, price-adjusted gross domestic product is expected to grow by 4.2 per cent in 2021.

German Exports

Together with China and the USA, Germany is one of the three largest exporting nations. In 2018 Germany exported goods worth 1,278.9 billion euros. The export quota was almost 40 % and over 50 % in industry.

Sentiment among German exporters has improved noticeably. In February, the ifo Export Expectations in manufacturing rose from 7.5 points to 10.7 points. This is its highest value since September 2018. China’s good economic situation and an increase in US production are helping German exporters.

But the robust trade with China and the US, contrasted with weakness from Britain. Exports to the UK market decreased by 3.3% and imports from the UK fell by 11.4 % in the same period.

The German confectionery industry has reported a marked drop in exports to the UK since the beginning of the year as companies, on both sides, struggle with export documents, longer delivery times and the need to re-think supply chains due to the impact of Brexit.

Germany's Chambers of Industry and Commerce said Britain's departure from the European Union was having a negative impact on German-British business and a trade agreement could only partly compensate for the downturn. 

The Government

The German Economy Ministry said that lockdown measures to slow the spread of the new coronavirus in Germany will continue to weigh on the economy in the first quarter of 2021, but prospects for exporters are cautiously positive. 

The German government expects Europe’s largest economy to grow by 3% this year, a government official told Reuters, a sharp downward revision from last autumn’s estimate of 4.4% caused by November’s imposition of a second coronavirus lockdown.

Chancellor Angela Merkel and the premiers of Germany's states agreed to extend restrictions to curb the spread of the coronavirus until March 7 at least.  

Lastly, parents who have to look after their children themselves because the authorities have ordered schools and nurseries to close are to be compensated for a large percentage of their lost earnings.

Some schools have opened their doors again this week.

Compiled by SA in February 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