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Germany: a top place for industry

October 22, 2012

Improvements in infrastructure and stable energy supplies have helped Germany gain ground as a top industrial location in the world. According to a new study, it now takes fifth place in global rankings.

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Worker follows production cycle on computer screen
Image: dapd

Germany edged closer to its main competitors with regard to its rating as a favorable industrial location, a study by the Cologne Institute for Economic Research (IW) showed on Monday.

The survey took a look at the leading 45 world economies, ranking Germany in fifth place, a substantial increase from 14th place back in 1995.

"Among Germany's strongest points are its stable supply with energy and raw materials, an advanced infrastructure, high education levels and a reliable legal framework," the IW think tank said in a statement.

All that glitters isn't gold

The study, which was commissioned by the German Economics Ministry, looked at a total of 58 indicators to determine a country's place in the rankings. The analysis of all major factors revealed a number of ongoing German weaknesses, including high labor costs, a growing lack of skilled workers and a relatively high tax burden on employers.

The IW table of the world's best industrial locations is still headed by the US where companies are found to face the lowest level of red tape. Sweden, Denmark and Switzerland also outdid Germany in the rankings, but the distance was getting shorter, said the Cologne based institute.

It also highlighted the dynamic developments in emerging countries which it said were rapidly catching up with highly industrialized nations. The dark spots in the business location rankings were Greece, Italy and Portugal which had fallen behind even more in the wake of the protracted eurozone debt crisis.

hg/cg (dpa, dapd)