Left Behind Germany: Switzerland Becomes the More Attractive Business Location

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Publication Date: 16.11.2025

Overview

  • Author: Michael Rasch
  • Source: NZZ.ch
  • Date: 16.11.2025
  • Estimated Reading Time: 5 minutes

Article Summary

What is it about? German companies are struggling with deteriorating location conditions, while Switzerland, despite higher wages, is becoming the more attractive business location through longer working hours and better framework conditions.

Important Facts:

  • German gross labor costs: $107,000/year, Switzerland: $110,000/year
  • Labor costs per hour: Germany $80.30, Switzerland $72.30 (purchasing power adjusted)
  • Annual working hours: Germany 1,334 hours, Switzerland 1,520 hours (almost 5 weeks more)
  • Sick leave: Germany 18 days/year, Switzerland 11 days/year
  • Industrial electricity price: Germany 189 euros/MWh, Switzerland 148 euros/MWh (22% cheaper)
  • Corporate taxes: Germany 30.1%, Switzerland 19.6%
  • German industrial production down 20% since 2018

Affected Groups: German industrial companies (especially mechanical engineering), workers in both countries, southern German border regions, politics and administration.

Opportunities & Risks:

  • Opportunities: Swiss locations offer higher efficiency, lower energy costs, business-friendly administration
  • Risks: Progressive deindustrialization of Germany, job relocations, loss of industrial base

Recommendations: German politics should implement reforms in ancillary wage costs, social systems, and bureaucracy reduction by 2030 to prevent further exodus.

Future Outlook

Short-term (1 year): More companies will examine location relocations; German ancillary wage costs continue rising due to skilled worker shortage.

Medium-term (5 years): Without reforms, deindustrialization intensifies; Swiss border regions benefit from German company settlements; possible social reforms in Germany.

Long-term (10-20 years): Germany could lose significant parts of its industrial base, while economic centers in Europe reshape; Switzerland establishes itself as an industrial location for German companies.

Fact Check

The OECD data on working hours and costs are verifiable through official statistics. The statements about Trumpf and Stihl are based on company information. The 20 percent reduction in German industrial production since 2018 is confirmed by the Federal Statistical Office. [⚠️ Still to be verified: Exact calculation methodology of purchasing power adjusted labor costs]

Additional Sources

  • OECD statistics on working hours and productivity
  • German Economic Institute (IW) - Studies on unit labor costs
  • Federal Statistical Office - Industrial production data

Source List

  • Original Source: Left Behind Germany: Even the high-wage country Switzerland is now more attractive in terms of labor costs, NZZ.ch
  • Additional Sources:
    1. OECD Employment Outlook, OECD, oecd.org
    2. IW-Trends on unit labor costs, German Economic Institute, iwkoeln.de
    3. Industrial production Germany, Federal Statistical Office, destatis.de
  • Facts checked: on 16.11.2025

Brief Summary

Switzerland has overtaken Germany in labor costs per hour - despite higher wages, longer working hours and higher productivity provide a competitive advantage. German companies face the choice between location relocation or waiting for overdue reforms. Without structural changes, Germany faces further deindustrialization.

Three Key Questions

  1. What risks to economic freedom arise when Germany loses its industrial base through excessive labor costs and bureaucracy?

  2. Where is more responsibility from German politics needed to regain competitiveness through reforms in ancillary wage costs and administration?

  3. How can innovative solutions be developed to increase the productivity of German locations, instead of focusing only on cost reduction?

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