Germany’s competitiveness – from ‘sick man of Europe’ to superstar and back: Where does the economy stand?

The current gloomy mood among German companies is due to a confusing mix of cyclical factors and structural challenges. A systematic analysis of the relevant business location factors reveals a mixed picture of pronounced strengths and clear weaknesses. Innovative power, an internationally competitive logistics infrastructure and a well-trained labour force continue to be among the strengths. However, demographic change and the clearly negative trend in basic school qualifications threaten to turn this current strength into a weakness. Other weaknesses include relatively low public investment and a high tax burden on companies. In terms of energy supply, Germany is also at a competitive disadvantage due to high costs, particularly in relation to the USA and Canada. Overall, there is an urgent need for action to build on strengths and tackle weaknesses in order to ensure that Germany remains competitive in the future.

Germany’s competitiveness – from ‘sick man of Europe’ to superstar and back: Where does the economy stand?(PDF, 602 KB, accessible)