Wages in German Construction Industry Rise

      By Friedrich Geiger 

    FRANKFURT--Employers and employees in the construction industry have agreed to increase wages by 3.2% in western Germany and by 4.0% in the east of the country, industry association Zentralverband Deutsches Baugewerbe said Friday.

    The wage hikes for the industry's around 750,000 employees becomes effective from May 1 and the agreement lasts for 12 months, according to ZDB. The minimum wage will rise to 11.30 euros ($14.58) per hour by January 2017.

    The German construction industry has been benefiting from increasing order intake in recent years. More and more Germans want to buy homes as they seek a safe investment amid financial market uncertainty and take advantage of low mortgage interest rates.

    The association and the labor union also agreed to bring tariff and minimum wages in eastern Germany in line with wages in western Germany within nine years. Wages in the east have been less due to lower productivity in the region which used to be socialist.

    Write to Friedrich Geiger at friedrich.geiger@dowjones.com