Temporary employment rate in German engineering at six per cent
January 2nd, 2012 | Topic: News
According to a current study from the Verband Deutscher Maschinen- und Anlagenbau (VDMA, or German Engineering Federation), member companies currently employ around 57,000 temporary employees in additional to their permanently employed staff of 945,000 (status: September 2011). “The likelihood of being taken on permanently is high and our companies do not mainly use this instrument for costs reasons,” emphasised VDMA President Thomas Lindner at a press conference. According to the survey a good third of the companies assessed the chances of a temporary employee currently working for them being taken on permanently to be over 30 per cent. Lindner described temporary employment in the sector as a “bridge to permanent employment”.
Compared to previous surveys about temporary employment, the temporary employment rate in engineering has gone up from three per cent in 2005 and five per cent in 2007 to six per cent now. According to the results three out of four companies employ temporary workers. Those surveyed reported that savings were not at the forefront: 40 per cent of the companies said the financial expenditure for employing a temporary worker was comparable with that for a permanent member of staff. Borrowing workers is even the more expensive alternative for every third company. From the VDMA’s point of view, that the instrument is used nevertheless shows the positive readiness of companies to pay for the flexibility gained through temporary employment. In this manner companies avoid losing sales and revenues in time of good economic growth.
German business wants to further expand exports in 2012
December 19th, 2011 | Topic: News
German business also wants to develop exports further in 2012. This is the result of a current study from the finance and information service provider Creditreform. Around 1,200 export oriented German companies of importance to foreign trade were questioned as part of the study. Although growth prospects are deteriorating, according to the survey these companies are assuming exports will rise next year. The majority of those asked – 57.4 per cent – are planning to increase the proportion of exports in their sales.
German companies see the greatest potential for increases in Eastern Europe. 18.7 per cent of the exporters surveyed want to start business relationships in the Russia/Ukraine region. Romania, Bulgaria, Croatia and Bosnia are also in demand. Primarily export oriented companies with many years of foreign experience want to follow the path to Eastern Europe.
Newer and less experienced export businesses are more careful in the Eastern Europe target region. Companies without much foreign experience want to commit themselves more strongly to euro countries such as the Benelux states, France, Austria and also to Scandinavia. New interesting foreign markets such as Turkey could provide dynamism in foreign trade in 2012. Thus 15.8 per cent of German exporters want to expand their export map to the Bosphorus.
R&D investments in Germany continue to grow
December 12th, 2011 | Topic: News
In 2010 German business spent a total of 46.93 billion euros on internal research and development – 3.7 per cent more than in 2009. These figures were reported by the Stifterverband für die Deutsche Wissenschaft in its current survey. Thus the proportion of business research investment as a share of gross domestic product (GDP) remained at practically the same level as the previous year at 1.89 per cent. Together with state expenditure on R&D the proportion amounted to an estimated 2.82 per cent. According to the latest planning data companies in Germany invested around 49.34 billion euros in 2011; the Stifterverband is even forecasting 49.9 billion euros in 2012.
In contrast, the R&D proportion for the whole European Union was only at an estimated 1.9 per cent in 2010. Thus the EU states missed the target they had set themselves of spending at least three per cent of gross domestic product on R&D investments by a long way. However, the President of the Stifterverband der Wissenschaft, Arend Oetker, assessed developments in Germany positively. The ambitious target induced the German government significantly to increase its research spending. According to the report, the financing share of the state in comparison with business grew noticeably for the first time in 15 years from 2008.
KfW Panel: Only the “Mittelstand” is creating new jobs
December 5th, 2011 | Topic: News
Small and medium-sized enterprises (SMEs) were the engines of employment and the driving force of the German economy from 2005 to 2010. This is shown by the new KfW-Mittelstand Panel 2011. According to this, the employment growth in the whole economy of 1.8 million employees in the period specified was exclusively borne by the segment of medium-sized enterprises. According to the Panel’s results small and medium-sized enterprises were also responsible for the upturn in the employment market in 2010. While 170,000 positions were cut in the public sector and in large business in comparison with the previous year, the Mittelstand created 670,000 new jobs.
As in the employment market, investment activity among small and medium-sized enterprises also showed higher dynamism. Although investment expenditure rose last year after the sharp fall in the crisis year 2009 (-15.9 per cent), this rise only amounted to 2.8 per cent. However, from 2005-2010 gross investment of SME companies was able to grow by a total of 11.2 per cent. In comparison: large companies merely increased their investment by 6.8 per cent in the same period.
According to the results of the KfW-Mittelstand Panel, this was reflected in a stable earnings situation over the years and as a result, a continually improved equity capitalisation in the Mittelstand. Thus although SMEs posted a drop in sales of 6.2 per cent in the crisis year 2009, they were able to more than make up for this in 2010 (+6.7 per cent). The collapse in 2009 also had hardly any effects on profit margins. They was also 5.1 per cent in 2009 and thus at about the same level as the other years.
German companies don’t expect recession
November 28th, 2011 | Topic: News
Despite the financial and debt crises, companies in Germany do not expect a recession. Half of businesses are also assuming that next year will see a constant business situation. Around 31 per cent even expect growth in production in 2012, nearly 19 expect a decline. This conclusion was reached by the Institut der deutschen Wirtschaft Cologne (IW, or Cologne Institute for Economic Research) in its current autumn growth survey, for which almost 2,600 companies were surveyed in Western and Eastern Germany. When estimating revenue developments the picture is unclear: 27.6 per cent of those surveyed expect higher revenues while 24.5 per cent are assuming declining results. What is interesting here is that companies in Eastern Germany expect better revenues than companies in the former West Germany.
However, businesses’ export outlooks have clouded over more markedly. Admittedly almost 24 per cent of businesses expect their exports to rise and only around 13 per cent expect a fall. But six months earlier companies assessed foreign business considerably more optimistically. Businesses also showed themselves to be somewhat more reserved in their investment plans than in 2010 – currently nearly 30 per cent of companies want to spend more and almost 20 per less on new acquisitions in 2012 than in this year.
Manufacturing industry and the service sector are showing themselves to be particularly keen on investing while the construction sector is tending to assume budget cuts. Luckily the bleaker prospects for growth are hardly having any effect on the employment market: most companies expect stable levels of employment in 2012 and 25 per cent of businesses even want to expand their number of employees next year.