Study: U.S. Companies Are Pulling Back on Investment in Germany

A new economic study has revealed a significant decline in direct investment by American companies in Germany, raising concerns among policymakers and business leaders about the country’s competitiveness on the global stage.

According to data released this week by Germany Trade & Invest (GTAI), the number of investment projects by U.S. firms in Germany fell by 27% in 2024 compared to the previous year. While the United States remains Germany’s top source of foreign investment in terms of volume, the downward trend marks a shift in sentiment among American businesses.

Analysts attribute the decline to several factors, including bureaucratic hurdles, high energy prices, labor shortages, and increasing regulatory complexity. Some executives have also cited concerns over Germany’s sluggish digital infrastructure and geopolitical instability in Europe.

“This development is a wake-up call,” said a spokesperson from the German Chamber of Commerce. “Germany must streamline its approval processes and present itself as a more agile and attractive location for international business.”

In contrast, investment from other countries — particularly from within the EU and Asia — remained relatively stable. The report warns that if Germany fails to address structural issues, it risks falling behind in global competition for innovation and capital.

German officials say they are reviewing economic policy tools to reverse the trend and restore investor confidence. No specific legislative actions have been announced yet.