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Germany:Textile labour costs gap narrows in Europe |
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2004-8-24
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Gesamttextil, the German Textiles association said the countries in Middle and Eastern Europe, were favoured destinations by many enterprises as production location due to lower labour costs and had lost a part of their competitive advantage in this area.
Not overlooking the cost advantage of Middle and East European countries as compared with their West European neighbours, the tendency for the gap to lessen should not to be overlooked.
Textile industry labour costs reportedly increased by almost 9% in the Slovak Republic while it went up by 17% in Hungary and in the Czech Republic, it stood high at 25%. Poland was the only country where labour costs remained almost steady.
West European states witnessed moderate increase in labour costs in the textile industry at the same time. France with 1.7%, Spain and Portugal with 1.8% and Italy with 1.9% remain below the rise in Germany. Denmark remains stable but is still the country with the highest labour costs .
In Great Britain, labour costs even decreased by a good 1%, in Greece by just 2%. But this is also a consequence of Forex rate shifts as well as the drop in labour costs in the USA (less by almost one per cent) and Japan (minus six per cent).
However, labour costs, even in the Czech Republic, the most expensive Eastern neighbour, make up just one-sixth of the amount which West German textile producers must bring up for this.
Four years ago, labour costs in West Germany were still ten times as high as in Czech. Thus, analysts who predict an equalisation of labour costs in the previous and new EU members by the end of this decade could be proven correct. |
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