Report
Germany: The sophistication of production no longer offsets the price level
Germany has always had higher production costs (especially in industry) than other euro-zone countries. Since Gerhard Schröder’s reforms, this has not prevented Germany from gaining market shares and developing its industry; Germany's advantage in terms of product sophistication has more than offset its disadvantage in terms of costs. But we see that this has no longer been the case since 2018, for two reasons: The labour cost differential between Germany and the other euro-zone countries has once again become very significant; Germany's is suffering from its productive specialisation in the "industries of the past", even though the country’s level of product sophistication in these industries is high.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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