Positive outlook

Over 41 million people in Germany were employed in 2011 – a record high since the country's unification in 1990, new figures published Monday by the Federal Statistics Office show.

The surprising statistic has inspired economic pundits agree that the employment figure will rise even further in the current year, although another increase of almost half a million as recorded in 2011 seems out of the question.

The director of the Cologne-based Institute for the German Economy (IW), Michael Hüther, spoke of a positive mood among German business leaders. A recent survey had looked into employment opportunities in altogether 46 industries in the country.

"Companies in 31 industries believe that the workforces will remain the same or increase," Hüther told Deutsche Welle TV. "Only firms in eight industries fear there will be job losses."

Moderate growth

But overall economic growth will slow down significantly. Analysts expect economic growth in 2011 to hover around 0.5 percent – a far cry from the approximately three percent achieved last year.

While governments across Europe are telling people they'll have to tighten their belts, Germans may even have slightly more in their pockets in 2012, mainly due to a number of amendments to the country's tax laws.

According calculations made by the Süddeutsche Zeitung newspaper, average German workers will have about 160 euros ($207) more in net income this year. This figure will rise after a second phase of tax legislation changes comes into effect in 2014.

Among other things, people will profit from slightly lower premiums for the country's statutory pension system. Also, workers can set off against tax a higher percentage of their old-age provisions.

DAX pointing upward

After a turbulent 2011 in which Germany's blue-chip DAX took a 15-percent dive, the country's lead index is expected to almost completely make up the losses incurred last year.

Some analysts predict that potential shareholders will make a point of including a number of shares from DAX-listed companies in their portfolios because of the positive economic outlook for Germany and partly because of a lack for sound investment alternatives.

The Association of German Chambers of Industry and Commerce (DIHK) said German consumers spent more on goods in 2011 than in each of the preceding ten years. The umbrella organization, representing more than three million entrepreneurs, reckons that the Germans' willingness to spend more will continue at least in the first quarter of this year.

Author: Hardy Graupner (dpa, AFP, Reuters)
Editor: Ben Knight