German industrial companies are frantically rehiring workers and ramping up capacity as they approach output levels last seen before the 2008 collapse of Lehman Brothers sent the global economy into a tailspin.
Orders for export-driven Germany's key sectors such as machinery, cars and chemicals are pouring in, say business leaders.
German engineering, the country's industrial heart employing 915,000, last week revealed a 61 per cent increase in orders year-on-year in May.
Manfred Wittenstein, president of VDMA, the German engineering association, said it had raised its production forecast for 2010 from a zero increase to one of 3 per cent.
“We are approaching normal capacity utilisation,” Mr Wittenstein said. “With this order inflow, we will soon face the problem of a skill shortage.”
Within a matter of months, many engineering and car companies were forced to switch from a long period of short-term work to rehiring contract workers and running full and even special shifts.
German unemployment fell to 7.5 per cent in June, the lowest level since December 2008.
Germany's upbeat news has prompted economists to lift their economic growth forecasts. Last week, Commerzbank revised its German GDP forecast for this year to 2.5 per cent from 1.8 per cent.
Mr Wittenstein and other industrialists forecast growth to slow down in the second half of the year.
“The Chinese market will calm down and previous year's figures will become harder to beat,” Mr Wittenstein said. Recent data from China and other parts of Asia have pointed to a slowdown in manufacturing on the continent.
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