Moderate Increase in Labor Costs in Germany Compared to the EU

Labor costs in Germany showed a moderate increase last year, remaining slightly below the average of the European Union. At an hourly rate of 41.30 euros, German companies had to bear 4.8 percent more than the previous year. This trend is in contrast to the EU average, where the cost per working hour, including non-wage labor costs, increased by 5.3 percent. The Federal Statistical Office announced this, evaluating cost developments in the industrial and private service sectors. Germany's position in the EU comparison is consistently characterized by above-average high labor costs—around 30 percent higher than the EU average. Looking at the European structure, only five other EU countries rank above the Federal Republic, led by Luxembourg and Denmark, whose labor costs per hour are at 53.90 euros and 48.10 euros, respectively. In contrast, economies like Bulgaria and Romania record the lowest hourly rates at 9.30 euros and 11.00 euros, respectively. Meanwhile, companies in the eastern countries of Europe are recording an increase in labor costs, on the one hand due to ongoing industrialization, and on the other hand prompted by relocation of production sites from high-wage regions. Three countries stand out in terms of growth rate: Hungary reports the highest increase at 19.9 percent, followed by Romania at 16.1 percent, and Poland at 15.9 percent. Sweden is an exception in the current year and is the only country that has recorded a decrease in labor costs.