Deindustrialization: Why German companies invest in the USA and Asia. 59 percent plan to relocate production.

Deindustrialization: Why German companies invest in the USA and Asia. 59 percent plan to relocate production.

According to a report by amp2.handelsblatt.com,

Deindustrialization continues to increase in Germany as many companies consider moving parts of their production abroad. A study by the consulting firm Deloitte and the industry association BDI shows that 59 percent of companies consider energy security and costs to be the most important reason for investing abroad. The high energy costs in Germany and the lack of planning security are cited as the main reasons for relocating production.

Experts consider the planned relief through an industrial electricity price package from the federal government to be insufficient to stop the trend of deindustrialization. Companies are considering moving parts of their production to Asia or the USA, where energy costs are significantly lower. Another problem is the bureaucracy in Germany, which makes setting up production abroad seem more attractive.

Due to this development, it is to be expected that the German financial sector and the domestic investment market will be affected. Companies that decide to relocate parts of their production based on the study results could cut jobs in Germany in the long term. The areas of energy supply and regulatory policy will also be influenced, as the government must now take measures to increase the attractiveness of Germany as a location for companies.

The development also shows that Germany has some catching up to do, particularly in terms of digitalization and infrastructure, and must ensure that these areas are strengthened in order to maintain its attractiveness as a production location.