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German companies hesitate: investments in the USA at a record low!
German companies are hesitant to invest in the USA; economic policy uncertainty was analyzed as the main reasons.
German companies hesitate: investments in the USA at a record low!
German companies are currently showing reluctance to invest in the USA. The reason for this lies in the uncertain economic policy situation, which is characterized by the erratic economic policy of the USA. According to the employer-related institute IW from Cologne, this uncertainty could deter potential investors. The assessment comes at a time when the average investments by German entrepreneurs in the USA between 2010 and 2024 amounted to around 4.6 billion euros in February and March, which corresponds to an increase of around 18 times compared to previous years. At the beginning of 2024, investments were almost 8.7 billion euros.
Nevertheless, there were also declines. Bill Clinton's first year in office, 1993, saw the lowest level of German direct investment in the USA. These striking changes raise questions about the economic policy conditions that are crucial for companies. The IW experts emphasize that investments in volatile political environments are associated with major risks and call for reliability and planning from US politicians.
Investment fluctuations and economic uncertainty
The uncertainty that typically prevails in a US president's first year in office is identified by the IW researchers as a key factor. It should be noted that the current figures on the level of investments should be interpreted with caution. Monthly values are subject to strong fluctuations and are often affected by subsequent corrections and special effects.
Overall, the data shows a clear trend: German companies are holding back their investments in the USA. Given the current economic conditions, the need to create reliable and predictable conditions is more urgent than ever. A destabilized investment climate could have negative effects on economic relations between Germany and the USA not only in the short term, but also in the long term.
For more information on FDI stock information, consult the Bundesbank.
In summary, it can be said that the current economic uncertainty in the USA is strongly influencing the investment decisions of German companies and the call for more stability in economic policy is becoming louder.