Recruit Sales in Germany Update Bulletin July 2024

GERMAN ECONOMIC INDICATORS July 2024

The German economy is slowly working out of a deep crisis. Price-adjusted gross domestic product will increase by 0.4% in 2024 and by 1.5% in 2025. The inflation rate will fall noticeably to 2.2% by mid-2024 and to 1.7% in 2025.

Most companies still rate the general situation as poor, expectations however regarding developments in the coming months have increased in all economic sectors.

On the one hand, the gradual improvement in the climate in the German sales markets and the resulting hope for a rise in new orders in manufacturing are likely to have contributed to the increased optimism.

Energy costs for manufacturing companies have continued their downward trend and are now at the level of 2020 thus lowering production costs, especially in the steel industry. That will make production in Germany more profitable again, allowing companies to work off more of their still high order backlogs, and energy-intensive industries to expand their production again.

Manufacturing with its export business is bolstering the economy, while construction continues its downward trend and suffers setbacks.

According to the available economic indicators, private consumption is likely to still stagnate.

The European Football Championship will not change that either and will not bring about a summer fairytale for the German economy.

The interest rate cut by the European Central Bank in June will probably be followed by two more this year. Lower interest rates, a stable labour market and strong income growth will give the consumer economy a boost and also gradually help construction back on its feet. It is assumed that consumer confidence will increase again, and the savings rate will gradually return to normal.

Industrial activity is also likely to continue its recovery and benefit from rising global demand.

Households are benefiting from strong wage growth, a gradual decline in inflation and a stable labour market.

The Forecast for Germany sees public finances improving, with the government deficit ratio expected to shrink from 2.5% last year to 1.1% in 2026.

German Exports July 2024

German exports surged by 2.4% in July, more than offsetting the 1.1% drop in June. The euro exchange rate continues to be weak, bolstering German exports. German companies with activities abroad are increasingly optimistic about global economic developments, according to the German Chamber of Commerce. Of the 4,300 companies surveyed, 31% expected an economic upturn at their overseas locations in the current year, boosted by slowing inflation rates and the hope of interest rate cuts.

While companies were more upbeat about their foreign-based operations, their expectations for China deteriorated once again. The continuing weak demand in the Chinese economy is seen as a business risk by 80% of the companies.

Employment

According to recent statistical data, Germany has 770,301 job vacancies. Many believe the figure is well over a million. The country has a wide range of opportunities in various sectors, including IT, healthcare, and hospitality.

Several immigration programs are being held in Germany to attract skilled labour to fill relevant job roles, especially in the healthcare sector. The country is planning to invite around 447,055 immigrants to fill various job positions. There is a high demand for job roles like engineers, nurses, doctors, aircraft technicians, and business analysts.

Recent reports show that Germany ranks at the ninth position for the quality of life it offers, attracting migrants from all over the world. The country's robust economy and a strong emphasis on skilled labour should make it a top choice for skilled immigrants to work and settle in Germany. However, for many, Germany is less attractive due to language issues, recognition of qualifications, getting work permits and general bureaucracy.

The average annual salary in Germany ranges between €44,164 and €75,000, and the minimum wage is €12.41 per hour as of 2024. The highest-paying German states include Berlin, Munich, and Frankfurt.

Summary

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.

*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

Some Facts about Germany 

• With a gross domestic product of 4,121 billion euros in 2023, Germany is the third largest economy in the world after the United States and China, making it the largest economy in Europe.
• Exports of motor vehicles and parts and chemical products in particular make Germany the third largest export nation in the world. At 70%, the service sector accounts for the largest share of the country's gross domestic product.
• Germany has a population of eighty-four million people.
• Germany is the seventh-largest country in Europe. Covering an area of 137,847 square miles, of which 34,836 square miles is covered by land and 3,011 square miles contains water.
• The economy of Germany is a highly developed social market economy. The country accounts for about 28% of the euro area economy according to the IMF. 
• Germany is one of the world’s premier locations 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.