German Economy’s Good Performance Being Closely Studied

As economists wait with bated breath for concrete action to prevent the crisis in the euro zone from spreading across the countries of Europe, German industry showed underlying strength as unemployment in Germany fell more than had been forecast.

The Federal Labor Agency based at Nuremberg came out with figures which showed unemployment in Germany falling to 6.9%. In November 20,000 more people were employed than anticipated bringing the actual number of unemployed down a notch to 2.91 million. Further evidence was provided by the Ifo economic institute which said that notwithstanding Europe’s woes, business confidence in Germany actually rose for the first time in five months.

Dusseldorf based economist Joerg Lueschow said order books were still strong and he did not foresee a decline in the labor force in the first half of 2012. In fact several companies are on a hiring spree. Porsche AG announced it will be adding 1,000 workers each year till 2018 while the Hamburg based Airbus SAS said it would be taking on 4,000 new workers in 2012.

German industry feels that its exports will cross the one trillion euro mark this year. Any losses due to the crisis in Europe will be made up by sales to developing countries in Asia.

Still experts feel that Germany’s growth will fall to 1% next year from 2.9% this year. Economists and policymakers all over the world including the US are pondering how far Germany’s good performance  will help the global economy.

Credit: ibtimes.com

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Posted by Mattie N. Horton on Nov 30 2011. Filed under Economy. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.