Stable competitiveness of the German economy in terms of labor costs
The competitiveness of the German economy in terms of labor costs, according to an analysis by the labor-affiliated Institute IMK, is stable. "We are at labor costs, as before the crises of the past years, in the upper middle range in Western Europe, and we see an upward trend in exports again," said the scientific director of IMK, Sebastian Dullien. According to IMK, labor costs per hour in the private sector here increased by an average of 5.0 percent in the year 2023. This is a relatively high value in the long-term comparison, but clearly less than in 2022 with an increase of 6.5 percent.
In the EU, labor costs increased by 5.6 percent in 2023 and in the Eurozone by 5.1 percent. According to economic researchers, Germany currently ranks fifth in the EU in terms of labor costs in the private sector, together with the Netherlands and directly before Sweden. However, the Swedish krona has again significantly lost value in the previous year, which means that Sweden, with labor costs of 41.60 Euro in the private sector, is now only slightly below Germany in terms of labor costs calculated in Euros, as the report of the Institute for Macroeconomic and Business Cycle Research (IMK) published on Tuesday shows.
- Despite the relatively high labor cost increase of 5.0% in the German private sector in 2023, as stated by IMK's analysis, the country maintains a stable competitiveness in labor costs within Western Europe.
- According to the IMK analysis, Germany's labor cost competitiveness, especially in comparison to countries like Sweden and the Netherlands, is significantly influenced by the exchange rate fluctuations of their respective currencies.
- Referencing IMK's analysis, the institute highlights that while labor costs in Germany have been increasing consistently, they are still lower than in 2022, highlighting the resilience and balance in Germany's economic structure.
