Why German Equities Are Set To Do Well

Why German Equities Are Set To Do Well - at www.moneyweek.com - the best of the international financial media

Restructuring in Germany at both the macroeconomic and microeconomic levels is now about to pay off. At a corporate level, the share of profits as a percentage of national income has already increased from 36% to 39% since the start of the decade.

This means that German companies, having already done much to relocate production costs in lower-wage economies or to promote flexibility amongst their unionised workforces, are fundamentally in very good shape. The euro has been a tremendous boon for German manufacturers, who have been able to clamp down on unit labour costs unlike many of their, for example, Italian competitors, who have no longer been able to devalue their way out of difficulty.

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