Germany – a location of contradictions: currently high sales growth, weak assessment of important framework conditions and decreasing attractiveness for investors
The transatlantic economic partnership is very stable and stronger than it has been for a long time, but the assessments of Germany and the U.S. are drifting apart
Increasing doubts on both sides of the Atlantic about the reliability of politics and growing concerns about trade disputes
Munich, June 18, 2024 – The American Chamber of Commerce in Germany (AmCham Germany) published the results of the Transatlantic Business Barometer 2024 at its 120th Annual Membership Meeting today in the Bavarian capital. The survey on the location conditions in the United States and Germany among the member companies of AmCham Germany is a cooperation project with the international management consultancy Roland Berger.
Some parameters of Germany as a business destination look very good for U.S. investors: More than one in two member companies that took part in the Transatlantic Business Barometer 2024 (TBB 2024) reported rising sales in 2023, and as many as 64% of them expect this to happen in the current year. Germany's outstanding positive location factors include the quality of employees (84%), the quality of research and development (75%) and the quality of supplier networks (61%). More than one in two U.S. companies surveyed rated Germany's potential as a sales market as "very good or good".
However, the overall picture is ambivalent. For the first time since the survey began 18 years ago, less than half of the U.S. companies active in Germany are planning to expand their activities. Not even one in three companies that took part in TBB 2024 rated the current location conditions as "very good or good". When looking ahead to the next three to four years, this proportion drops to 29 percent. Germany's location factors with the highest "less good or poor" scores include energy costs (84%), economic and industrial policy and the quality of digital infrastructure (61% each) and labor costs (59%). The negative assessment of the general reliability of politics is also high in Germany at 50%; in the U.S. it is even higher at 65%.
Many other parameters demonstrate the extent to which the attractiveness of Germany and the U.S. as business locations for investors in the other country is drifting apart. Last year, 61% of German companies in the U.S. that took part in TBB 2024 achieved rising sales. This year, 70 percent of them expect this. An equally large proportion of them would like to expand their activities in the U.S.. 80% of the German investors surveyed rate the location conditions as "very good or good", referring primarily to the potential as a sales market (85%), the framework conditions for start-ups and entrepreneurship (80%) and the quality of the digital infrastructure (75%). For 65% of the German companies surveyed, the level of energy costs in the U.S. is "very good or good".
Germany and the U.S. have come closer together on one topic: Around 90 percent of German companies surveyed in the U.S. are "Somewhat concerned or very concerned" about trade-distorting measures; a year ago, this figure was two percentage points lower. Among U.S. companies surveyed in Germany, 71 percent are "somewhat concerned or very concerned" this year; in 2023, the aggregate figure was 17 percent.
AmCham Germany President Simone Menne therefore emphasizes: "The reduction of trade barriers in the transatlantic partnership has long been a priority, but even more so in economically and politically uncertain times. The freer the transatlantic trade and the more intensive the mutual networking, the stronger the partnership with all its positive effects for growth, jobs and prosperity on both sides of the Atlantic."
Marcus Berret, Global Managing Director at Roland Berger, calls for Germany to become a more attractive business location for investors again: "The German business model is not only coming under pressure from outside. We haven't done our homework in the last ten years. We need to get Germany back on track - quickly and pragmatically. To do this, we need an investment and structural offensive. A feat that business, politics and society can only accomplish together."
At the business conference following AmCham Germany’s Annual Membership Meeting, Marcus Berret from Roland Berger will present selected results of the Transatlantic Business Barometer 2024. These will then be categorized and discussed by a top-class panel:
- Marcus Berret, Global Managing Partner, Roland Berger
- Klaus Bürg, Managing Director & Vice President, Palo Alto Networks EMEA
- Agnes Heftberger, Corporate Vice President, Microsoft Germany
- Lukas Köhler MdB, Deputy Chairman of the Free Democratic Party
- Catherine Hunt Ryan, President, Manufacturing & Technology, Bechtel
The panel discussion will be moderated by Daniel Andrich, Managing Director of AmCham Germany.
The results of the Transatlantic Business Barometer 2024 can be downloaded here in German and English.
The program of the business conference following the 120th Annual Membership Meeting on June 18 can be found here.
