February 23, 2024

American companies want to invest more in Germany

As of: July 6, 2023 at 1:48 p.m

While foreign investment in Germany has generally collapsed recently, interest from American companies has remained stable. In fact, more than half want to expand their activities.

Despite high energy prices and strong domestic support through the so-called Inflation Reduction Act (IRA), the majority of American companies active in Germany want to invest more in this country. “Germany remains attractive for American companies,” Simon Minh, president of the American Chamber of Commerce in Germany (AmCham Germany), told Reuters news agency.

High energy prices are a burden. “But companies plan for the long term and do not change their investment plans temporarily,” says Meaney. A current survey conducted by the American Chamber of Commerce in Germany shows that more than half of American companies want to expand their activities in Germany within the next three to four years. For example, the quality of staff is praised.

AmCham calls for improvement Framework conditions

At the same time, according to the US Chamber of Commerce, American companies have become more cautious about their positive evaluation of the site. They are now facing difficulties in finding skilled workers. Talent is truly needed everywhere. “For example, there is a shortage of industrial engineers, software engineers, artificial intelligence experts and managers, as well as truck drivers and technicians,” Meaney said. Skilled workers ensure innovation, competitiveness, growth and employment. It is therefore important to actively address the shortage of skilled workers.

The policy should create the framework conditions for an attractive and sustainable site. The president of the American Chamber of Commerce stressed that “businesses in Germany must be able to remain competitive at the international level.” Above all, it needs secure and affordable energy supplies, significantly improved digital infrastructure, and faster bureaucratic procedures.

Record foreign flows of investments

International investors are now increasingly withdrawing from Germany precisely because of the high costs and great effort involved. Their compliance fell for the fifth time in a row last year, falling to its lowest level since 2013, a recent study by audit and consulting firm EY showed. In 2022, foreign companies announced 832 investment projects in Germany, a decrease of one percent.

The German Economic Institute (IW) also recently reported that companies pulled more money out of Germany for investments last year than ever before. Accordingly, the investments of German companies abroad were 125 billion euros higher than the investments of foreign companies in Germany, which collapsed almost completely. “The numbers are alarming: in the worst case, this is the beginning of deindustrialization,” IW warned.

The United States remains the first investor

However, the United States appears to be heading towards going off the grid. According to the German government-owned economic development agency Trade and Investment (GTAI), the United States was also the largest investor in Germany last year. 279 new settlements and expansions alone were registered. “This is great,” said Robert Herrmann, managing director of GTAI. “After all, there is tremendous support for domestic investment in the United States through the so-called Inflation Reduction Act (IRA).”

According to GTAI, the availability of renewable energies, such as wind energy or photovoltaics, is becoming increasingly important when recruiting investors. “Whether it's Microsoft, Apple, smaller data center providers or even battery manufacturers like Northvolt – this is an important argument for everyone,” says GTAI expert Achim Hartig. “The good availability of renewable energy is now a real locational advantage for Germany.” Its share of total electricity consumption rose to 46 percent in 2022, and is expected to reach at least 80 percent by 2030.

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On the other hand, the lack of skilled labor is not an obstacle to settling in Germany because this is the case in all European countries. On the other hand, the lack of space is a particular disadvantage of the site. “Space availability is an issue,” said general manager Hermann.