US investments in Germany at a historically low level!

US investments in Germany at a historically low level!

Germany's attractiveness as an investment location has noticeably decreased. US companies are increasingly withdrawing from investments in Germany. According to a recent study by sueddeutsche.de The number of US investment projects in 2024 fell by 27 percent to just 90. This is the largest decline among the top locations in Europe, while the total number of US projects in Europe fell by only 11 percent.

What is particularly worrying is that Germany is recording its lowest figure since 2011, with a decline of 46 percent since 2017. Aggressive tariff policies by the US government are creating uncertainty for large companies and exacerbating an already difficult situation. Despite these declines, China remains the top investor in Germany, with 96 projects, a decline of 3 percent. The total number of foreign investment projects fell to 608, a decline of 17 percent compared to the previous year.

A look at the investment figures

The challenges are obvious: the total volume of foreign investments in Germany in 2024 was around 23.2 billion euros. Although this sum is lower than in the record years 2023 (34.8 billion euros) and 2022 (25.3 billion euros), it is higher than the figures from 2019 to 2021. According to tagesschau.de 229 projects from the USA, 202 from Switzerland and 199 from China were registered. Particularly noteworthy are the seven projects, each with a volume of more than 500 million euros.

The largest individual investor, Amazon, plans to invest 8.8 billion euros in cloud infrastructure and an additional 1.2 billion euros in logistics and corporate headquarters. Microsoft, on the other hand, plans to invest 3.2 billion euros in AI infrastructure and cloud capacities. Apple is also showing interest in further expanding its research center in Munich.

Competitiveness in view

Despite the declining numbers, interest in Germany remains. Political stability and legal certainty are perceived as advantages of the location. A survey found that 24.4 percent of companies reported declining international competitiveness in April. In comparison, the proportion within the entire EU fell from 20.9 percent to 13.4 percent.

The prudent investment policy of the new federal government, which plans further investments in infrastructure and defense, is seen as the key to strengthening the location. In addition to the challenges of international competition, particularly customs disputes, it is essential to initiate reforms to make Germany more attractive as a location.

The figures for the German economy give food for thought: In 2024, fewer foreign investments were registered in Germany for the third time in a row, which has reignited debates about the competitiveness of German industry. The decline in investment in Germany is only two percent, while the overall European decline is 4.6 percent.