An excellent labor force and efficient production processes have led to an increase in productivity in the past decade – higher than that in labors costs.
Since 2016, labor costs have risen in most European countries (EU-28) in almost every year. The annual growth rate averaged 2.3 percent between 2016 and 2019. While some countries – particularly those in eastern Europe – experienced an increase of about 6.6 percent, Germany experienced a lower labor cost rise with 2.8 percent.
This has led to a genuine competitive cost advantage – particularly in manufacturing. Recently, the growth of unit labor costs in Germany has been recorded at 2.0 percent. Similar rates have been registered in the Czech Republic, in Slovakia and in Hungary.