German labour costs put pressure on industry competitiveness - BAVC

14 March 2013 16:54  [Source: ICIS news]

LONDON (ICIS)--Germany’s high labour costs are putting pressure on the competitiveness of the country’s chemical industry, a trade group said on Thursday.

“The German labour cost disadvantage versus established major chemical producing countries such as France, Italy or the US remains large,” German chemical employers group BAVC said, citing a comparative study of chemical industry labour costs from 2008 to 2011.

Over the study period, Germany’s chemical industry did not manage to improve its labour cost position against major chemical producing countries in Europe and elsewhere, BAVC said.

Chemical industry labour costs in western Germany were €48.95/hour ($63.57/hour) in 2011, the second highest in Europe after Belgium. In eastern Germany’s chemical industry, wage costs were €34.31/hour in 2011.

By comparison, chemical producers in neighbouring eastern European countries such as Poland, the Czech Republic, Slovakia or Hungary had wage costs ranging from €9 to €12/hour in 2011.

Over the 2008-2011 period, Germany’s hourly chemical industry wage costs rose 9.0% in the west of the country and 15.9% in the east, BAVC said.

Within the eurozone, only Belgium, Italy, Slovakia and Slovenia recorded higher increases in hourly wage costs over the 2008-2011 period, BAVC said.

Meanwhile, major eurozone chemical producing countries such as France and the Netherlands saw only moderate increases in labour costs.

Outside the eurozone, the UK’s hourly chemical labour costs fell 2.2%, when measured in terms of euros. However, in terms of pounds sterling, UK chemical wage costs were up 6.6% over the 2008-2011 period.

Outside Europe, Japan’s hourly chemical labour costs rose 46.5% on a euro-basis, mainly because of currency effects, and were up 6.6% on a yen-basis.

Chemical labour costs in the US rose 6.2% on a euro basis, but were up only 0.5% in US dollar terms over the 2008-2011 period, BAVC said. 

Labour costs are a decisive competitive factor for chemical producers, given that chemical products are traded around the world and firms can shift investments from country to country, the group said.

Germany’s high chemical labour costs will only be sustainable as long as the industry can operate at a high level of productivity, the group added.

BAVC did not comment on labour cost trends in China or India.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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