Productivity growth in Germany plummeted

Berlin. Productivity progress in Germany has collapsed. In the 1980s and 90s, the economy became two percent more productive every year. In the 2010s it was still one percent. Over the past six years, the increase has averaged just 0.3 percent.

This is the result of a study by the German Economic Institute (IW) on behalf of the Family Business Foundation, which is available exclusively to Handelsblatt. “Productivity is the central engine of prosperity – and it is precisely this engine that has been stuttering in Germany for years,” says IW macroeconomics boss Michael Grömling.

Productivity growth is no longer sufficient to maintain prosperity in Germany. Because of demographic change, the German economy will have fewer workers available in the next few years. In order to compensate for this through more productive working methods, growth would have to increase to 1.6 percent per year, the study shows.