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RF_Getty_492693613_RZ[1] Mid adult male technician maintaining cables in engineering plant | © GettyImages/Sigrid Gombert

Investment Environment

Productivity in Germany - Key Data

An excellent labor force and efficient production processes have led to an increase in productivity - higher than labor costs - over the past decade.

Germany's reputation as a production powerhouse precedes it. A highly skilled workforce, stable labor costs and advanced manufacturing developments make it the production site for new innovations.

Competitive Production

Germany is an attractive production location thanks to high productivity, stable labor costs and advanced manufacturing leadership.

High Productivity

In terms of nominal unit labor costs, Germany has gained in productivity over the past decade. While some European countries, especially in Eastern Europe, are showing a substantial increase in nominal unit labor costs, Germany has registered a moderate growth of around just two percent. As a result, Germany has become more competitive – particularly in manufacturing.

Stable Labor Costs

The labor cost difference between Germany and its neighbors in Eastern Europe has been reduced significantly. Since 2016, labor costs in manufacturing have been rising in the EU-27 member states at an annual rate of 2.6 percent. While labor costs in some EU countries – and particularly those in Eastern Europe – have been growing at an annual rate of more than five percent, labor costs in Germany have been increasing at a rate of just 2.2 percent.

Highly Automated Manufacturing

Production in German manufacturing is highly automated. According to the International Federation of Robotics, 346 industrial robots per 10,000 employees have been in operation in 2019. In absolute terms, 20,500 industrial robots were deployed in that year alone. Today, Germany is the European leader in industrial automation. Clients in the automotive and electronics industries are the primary beneficiaries of industrial robot installation.

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