The Structure of Labour Costs in the German Economy

In 2014 labour costs per full-time employee in manufacturing industry increased in western and eastern Germany by 2.4 per cent and 4.1 per cent respectively, making cost dynamics in both parts of the country considerably stronger than in the previous year. At the same time, productivity stagnated, resulting in a noticeable deterioration in cost competitiveness. With a cost level of 41,900 euros, eastern German manufacturing retains its cost advantage of a third over its western counterpart (62,920 euros). In the services sector there is a wide gap between the transport (44,100 euros) and trade (45,780 euros) sectors and financial service providers (84,580 euros). At 69,330 euros, business services also incur considerably higher costs than manufacturing.