The Structure of Labour Costs in the German Economy

In 2013 labour costs per full-time employee in manufacturing (including energy and con-struction) increased by 1.8 per cent in western Germany and by 0.9 per cent in the east of the country, making cost growth in both regions weaker than in recent years. However, the impact of this deceleration on competitiveness was reduced by a fall in manufacturing productivity in 2012 and 2013. With costs of 40,890 and 62,290 euros respectively, eastern German manufacturing continues to offer a cost advantage of around one third over its western counterpart. Labour costs in the service sectors vary widely from 43,920 euros in transport and 45,610 euros in trading to 79,510 euros for financial service providers. At 62,130 euros Germany’s business services also have somewhat higher labour costs than manufacturing industry.