The upward trend in costs has eliminated Germany's advantage in terms of level of product sophistication

Germany gained export market shares from 2006 to 2017 even though its manufacturing unit labour costs were higher than in the other euro-zone countries. It has a higher level of product sophistication than the se countries, which offset the high level of labour costs during this period . Germany also benefited from low labour costs in services, which reduced production costs in industry. But Germany has lost export market shares since 2018: despite the level of product sophistication, which remains high, the rise in labour costs in industry and services has led to a deterioration in Germany's overall competitiveness (cost and non-cost, quantitative and qualitative).