Rising labor costs are weakening our competitiveness.

Literal

Labor-cost [possessive-の] rise [by-で], our competitiveness [topic-は] weakening.

労働コスト uses the loanword コスト ('cost'). 競争力 (きょうそうりょく, 'competitiveness'). 弱まっている ('is weakening') uses the intransitive 弱まる + ている for an ongoing process.