Economic upswing to boost labour market in 2008

Several industrial sectors in Germany are quite optimistic for 2008. According to Prof. Michael Hüther, who is director of the Institute for the German Economy (IW) in Cologne, the findings of a recent study demonstrate that Germany is still benefiting from a flourishing world economy and from domestic demand. German trade associations are still in high spirit even though not as much as last year.

According to the IW, ten out of 45 associations interviewed think that the current economic situation is better than at the end of 2006. Another 23 say that it had remained unchanged while 12 consider it to have deteriorated.

For 2008 most trade associations expect business to be at least as good as in 2007. This would also have a positive effect on the labour market. However, Mr. Hüther warns against to much euphoria given that the German economy depends to an ever growing extent on the global economic situation.

With regard to output optimists are in the majority. Out of 45 trade associations interviewed 25 expect a slightly increase output or turnover than in 2007. Business in mechanical and plant engineering is even expected to grow significantly. Another 14 lines of industry believe that output will remain stable. Only four associations, e.g. the banking business, think that there may be a slight fall in output.

With regard to investment, 25 associations out of 45 think that member companies will invest as much in 2008 as in 2007 while 14 even forecast increased investment. Just 6 industrial sectors believe that there will be less investment. In particular retail trade is pessimistic in this respect.

With regard to the labour market respondents were quite optimistic. 16 out of 45 associations believe that in 2008 respective member companies will create more jobs. Only 6 associations expect job cuts for their respective industrial sectors. About fifty percent of trade associations forecast the number of employees to remain unchanged. GERMAN