German companies investing more heavily abroad, survey finds

The German Chamber of Commerce and Industry (DIHK) says its members are investing abroad with increasing frequency.

This year, 43% of industrial firms are planning to invest outside Germany – an increase of 3 percentage points compared with last year, according to an economic survey conducted by the DIHK and published on Thursday.

The survey found that cost savings are a particularly significant factor, with 41% of firms intending to invest outside Germany for this reason.

This represents a sharp rise of six percentage points year-on-year and the highest figure since 2003.

"The reasons for this are clear: rising costs, structural problems and a weak economy in Germany," said Volker Treier, head of foreign trade at the DIHK.

The declining competitiveness of the domestic market is forcing companies to relocate abroad. "Companies are losing confidence in the business environment here," he said.

The survey reveals significant changes in the target regions for German foreign investment. North America, in particular, is losing its appeal. The proportion of companies with investment plans there has fallen from 48 to 44%.

At the same time, engagement in Asia is on the rise again. The proportion of German industrial companies investing in China rose from 31% to 34%. The Asia-Pacific region (excluding China) is also gaining in importance, growing from 21 to 26%. 

The survey found that the eurozone remains the most important region for German foreign investment, accounting for 64%. Its stability, the single market and the single currency provide reliable conditions for investment.

The DIHK said the figures are the result of a special analysis of 1,700 industrial companies participating in the latest business survey.