First Choice in Europe
A recent study conducted by the American Chamber of Commerce highlights the positive regard in which the German business environment is held by US companies. 73 percent of participating American companies named Germany as their first choice – followed by Eastern Europe (57 percent), and Western Europe (33 percent) respectively.
The UNCTAD World Investment Prospects Survey 2012-2014 confirms Germany’s reputation as the most attractive business locations in continental Europe. One hundred Trans-National Companies ranked Germany first within the EU-15, and third internationally as top destination for 2012-2014. The Ernst & Young study on the attractiveness of the European economic area (2013) also shows that Germany is the number one business location in Europe and the number six worldwide.
This year’s results (2015) fall in line with earlier UNCTAD reports, which predicted that interest in investing in Germany was likely to grow until at least 2015. In 2012, the UNCTAD ranked Germany the number three most promising place to invest, behind the US and China. Major deals in the German market helped to spur investment in 2013, and are expected to continue to spur growth well into 2014.
The German economy also ranked high in the annual Bloomberg business report, which predicts the best places to do business in a given year. Germany was ranked 5th again this year and scored especially high for its high level of economic integration, low overhead costs and a good consumer base. The increased level of investment, especially in the second half of 2013, could continue to impact Germany’s business rankings positively.
High Scores in Infrastructure and Workforce
In the above mentioned Ernst & Young study, over 800 international decision-makers were surveyed on Europe and a further 201 companies were asked questions with a specific focus on Germany.
Germany received many great marks for various business location factors. These include infrastructure (telecommunications and transport), workforce qualifications and the social climate. 56 percent of those surveyed predict that Germany’s attractiveness will continue to grow in the coming years.
The study further shows that Germany’s growth drivers are in the transportation and automotive industries, environmental and energy technology, as well as the information and communication sector. It is no surprise that 64 percent of companies surveyed are convinced that Germany is pursuing a policy that attracts international investors.
European Stocks at the Top
According to the German Central Bank statistics for 2011, fifty-seven percent (or EUR 313 billion) of all FDI stocks in Germany originate from within the EU-27, with a further nine percent stemming from the remaining European non-EU countries.
Investments from outside the EU continue to grow. North America accounts for 23 percent of FDI stock, while Asia holds a six percent share. Especially Asian countries increased their FDI stocks in Germany in recent years. Germany is the world’s largest recipient of new Chinese fdi projects.
The most important countries as sources for new investment projects are the USA (24 percent of all investment projects), Switzerland (eight percent), and UK (eight percent), respectively. The ICT & software industry, and business & financial services are leading sectors in attracting new projects. The automotive, industrial machinery & equipment, consumer goods, and chemical industries are likewise attractive foreign investment sectors in Germany.