Are German companies leaving the country?
Should I stay or should I go? Given Germany's high cost and sluggish growth, some business leaders are mulling relocating, or at least investing abroad
Should I stay or should I go? Given Germany's high cost and sluggish growth, some business leaders are mulling relocating, or at least investing abroad. DW has a look at the numbers. German companies are continuing to move abroad — and that applies to businesses of every size. According to press reports, Gardena, the Ulm-based garden tools specialist, plans to cut 250 jobs in Germanyand partially relocate operations to the Czech Republic. That amounts to a reduction of 10% of its domestic workforce. Major global players such as BASF are also continuing to invest abroad. Earlier this year, it become known that the chemical company intends to relocate service positions to India, with many jobs at its Berlin site coming under particular pressure. Relocations and job losses Last year, the situation was described in even more dramatic terms. "Germany's industrial crisis is running at full speed," wrote the online magazine Finanzmarktwelt in November, citing figures from the Federal Statistical Office from 2018 to 2023. More recent figures have yet to be published by the office. According to the data, around 1,300 German companies with more than 50 employees relocated business functions abroad between 2021 and 2023.
That's equivalent to 2.2% of all companies of that size based in Germany in 2023. These relocations are said to have cost approximately 50,800 domestic jobs. Many feared this trend would continue or even accelerate, given Germany's high energy and labor costs. However, Germany's state-owned development bank KfW is already observing a different trend. In June, its research department announced that: "Many medium-sized companies are withdrawing from international business." According to the bank's findings, the number of German medium-sized companies who were active abroad dropped from around 880,000 in 2022 to some 760,000 a year later. "The general conditions for foreign trade have deteriorated significantly," said Dirk Schumacher, KfW's chief economist, attributing this to "geopolitical tensions in Ukraine and the Middle East, growing export competition from China in key industries and the protectionist trade policy of the United States." Consistently inconsistent A rather different picture is painted by the Association of German Chambers of Commerce and Industry (DIHK). Referring to its business climate survey from early 2026, DIHK spokesman Sven Ehling said cost pressures on German industry had reached a record high, prompting many companies to plan greater investments abroad. According to DIHK, 43% of industrial companies are planning foreign investments this year, three percentage points higher than the previous year.
The BriefWire