Germany Reports Record High of New Investment Projects Germany is a very attractive location for foreign investors. Germany Trade & Invest (GTAI) and the economic development agencies of the German Federal States as well as international databases have registered record numbers of foreign direct investment projects over the last years. The number of projects companies that want to invest in Germany that GTAI handed over to the Federal States economic development agencies was also very positive. The number of project source countries rose to 72 in 2012, up from 64 in 2011. : Number of Projects in Germany by Sector (2007 2011) Healthcare, Pharma, Biotechnology 5 % Transportation, Storage & Logistics 6 % Energy, Minerals, Metals 6 % Textiles 7 % Consumer Goods (incl. Food & Beverages) 7 % Hotel, Tourism, Entertainment Electronics & Semiconductors 7 % 2 % Other Sectors 4 % Numbers of Projects: 3,550 Chemicals, Plastics, Paper 8 % ICT & Software 18 % Business & Financial Services 15 % Automotive, Industrial Machinery & Equipment 15 % The economic development agencies of the German Federal States reported more than 850 new or capital-widening investments in 2012. Likewise, international foreign direct investment (FDI) databases such as the Financial Times fdi Markets noted all-time highs for Germany. In 2011, fdi Markets reported 853 investment projects. This beat the previous record of 777 FDI projects in 2010. Both new Greenfield projects and capital-widening investments are considered projects, unlike mergers & acquisitions (M&A). 2012 looks promising thus far. The all-time high could be surpassed again. fdi Markets registered a total of more than 3,500 investment projects by almost 3,500 foreign companies since 2007. This makes Germany the fith most popular location worldwide. The most important source countries for projects are the USA, Switzerland, and the UK. The fast rise of Chinese investments in the last five years should be highlighted. Germany has become the focal point for Chinese investors. Over the last years, Germany continuously received most of all the foreign direct investments out of China. Source: fdi Markets 1
The broad industry distribution of foreign investments is remarkable. They can be attributed to 39 different industries. ICT and software claimed the biggest share of capital invest with 18 percent. It is followed by finance & professional services and vehicle & machinery manufacturing with 15 percent each. Mostly, sales offices were established. Thanks to Germany s high degree of industrialization it attracts many production projects too. One in seven companies wants to manufacture in Germany. Foreign Direct Investment Stocks Grow Continuously : FDI Stocks in Germany: Origin of the Investor by World Region (2011) Rest of the Asia Latin World 5 % America 1 % 1 % North America 10 % Rest of Europe 8 % 549 bn EU27 76 % Due to this ever more rapid development of new investments, foreign direct investment stocks grew continuously. While they amounted to EUR 292 billion in 2000, they reached the record high of EUR 549 billion in 2011. According to Bundesbank (the German central bank) data, more than half of stocks come from countries within the European Union. If investments by companies from the other European countries are added to this the share will rise to almost two thirds. North America, Asia, and the rest of the world follow with 23 percent, six percent, and five percent, respectively. Germany ranks seventh in the international comparison of FDI stocks according to UNCTAD, the United Nations Conference on Trade and Development. Source: Bundesbank 2012 Foreign Direct Investment Foreign direct investment (FDI) comprises the investment in assets abroad made by domestic investors. In contrast to portfolio investment, foreign direct investment mainly aims at influencing and controlling business operations. Its distinguishing feature is a share in foreign firms of at least ten percent.
Stock of German Foreign Direct Investment into the E&E Industry Abroad : Stock of German Foreign Direct Investment into the E&E Industry Abroad, bn 25,1 20,8 23,0 26,0 29,0 35,3 46,2 45,3 52,9 56,3 In 2011 the stock of German foreign direct investment (FDI) into the Electrical and Electronic (E&E) Industry abroad has increased by six percent (year over year) to 56.3 billion euros. This value constitutes a new all-time high since the introduction of the FDI survey by the Deutsche Bundesbank in 1976. (The recent survey has been conducted according to the new WZ 2008 classification for the first time) In the last decade the sector s FDI has more than doubled. 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 The 1,392 E&E firms abroad that received German FDI employed a total of 665,000 people and achieved a sales volume of 132 billion euros in 2011. Compared to 2010 the number of firms in which investments were made has dropped by four percent. Employment and sales, in contrast, have grown by two and six percent, respectively. Top Ten Investment Targets in the Foreign E&E Industry : Stock of German Foreign Direct Investment into the E&E Industry Abroad, Top Ten Countries 2011, bn 1. USA 2. Austria 3. China 4. France 5. Switzerland 6. Spain 7. Brazil 8. United Kingdom 9. India 10. Italy 1,8 1,8 1,7 1,6 1,6 1,4 3,3 3,9 5,1 17,7 The aforementioned direct investment of 56.3 billion euros into foreign E&E firms has been spread in almost equal shares to Europe (43 percent) and America (39 percent) in 2011. The USA remain the most important foreign investment target with a volume of nearly 18 billion euros and a share of 32 percent, followed far behind by Austria (5.1 billion euros), China (3.9 billion euros), France (3.3 billion euros) and Switzerland (1.8 billion euros). While the stock of German FDI in Switzerland and Italy has declined by two and ten percent in 2011, respectively, it has risen considerably, amongst others, in Austria (plus 33 percent), United Kingdom (plus 29 percent), India (plus 25 percent) and Brazil (plus 20 percent).
Stock of the German E&E Industry s Foreign Direct Investment The FDI stock of the German E&E industry has continued to increase in 2011, once again reaching a new record high of 57.2 billion euros. The branch s share in total FDI of the German manufacturing industry has climbed to 19 percent by now. Compared to 2002 : German E&E Industry: Stock of Foreign Direct Investment, bn 49,1 52,1 57,2 its stock has almost tripled. By the end of 2011 330 German E&E firms have held direct investments abroad. The difference between the stock of German FDI into E&E firms abroad in the amount of 56.3 billion euros and the FDI stock of the German E&E industry totaling 57.2 billion euros can be explained by the fact that both the German E&E industry and other domestic industries make foreign investments not only in their own but also in other sectors at a time. 34,5 38,9 41,5 43,4 20,6 24,9 28,6 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Foreign Direct Investment into the German E&E Industry : Stock of Foreign Direct Investment into the German E&E Industry, bn 2011 2010 2009 28,0 32,5 32,9 By the end of 2011 foreign investors have slightly reduced their stock of direct investment into the German E&E industry by one percent (year over year) to 32.5 billion euros. This is three billion euros below the all-time high achieved in 2008. 2008 2007 2006 2005 2004 2003 2002 25,2 23,4 23,0 22,3 28,8 29,3 35,5 737 among about 4,000 E&E firms in Germany also have one or more foreign providers of FDI capital. These E&E firms employ 271,000 people and have generated sales of 100 billion euros in 2011. In the same year the number of firms with foreign direct investment contribution and their employment have declined by one percent each. Their sales, however, have increased by eight percent.
Stock of Foreign Direct Investment (FDI) (by the end of the year) Unit 2009 2010 2011 Total German FDI bn 980.4 1,094.9 1,144.9 Change on year earlier % 2.8 11.7 4.6 German FDI into the manufacturing sector abroad bn 268.7 305.3 325.0 Change on year earlierr % 2.3 13.6 6.5 German FDI into the E&E industry abroad bn 45.3 52.9 56.3 Change on year earlier % -1.9 16.8 6.4 Number of foreign E&E firms in which an investment was made Number 1,421 1,442 1,392 Change on year earlier % -1.3 1.5-3.5 Number of employees in these firms 1,000 607 651 665 Change on year earlier % -14.1 7.2 2.2 Sales volume of these firms bn 103.9 124.2 132.1 Change on year earlierr % -12.0 19.5 6.4 Top ten target countries: USA bn 11.8 17.3 17.7 Change on year earlier % -5.3 46.4 2.0 Austria bn 2.4 3.9 5.1 Change on year earlier % -1.2 58.8 32.6 China bn 2.6 3.6 3.9 Change on year earlier % 9.2 38.6 8.9 France bn 3.6 3.2 3.3 Change on year earlier % 58.0-12.2 53 Switzerland bn 1.8 1.8 1.8 Change on year earlier % 15.6 1.0-1.9 Spain bn 1.0 1.2 1.8 Change on year earlier % 3.6 19.4 43.7 Brazil bn 1.2 1,4 1.7 Change on year earlier % 5.7 12.6 20.0 United Kingdom bn 0.9 1.3 1.6 Change on year earlier % 30.7 41.8 28.5 India bn 1.0 1.3 1.6 Change on year earlier % 31.2 34.5 24.6 Italy bn 1.4 1.5 1.4 Change on year earlier % -0.1 12.8-9.6 German E&E industry: FDI abroad bn 43.4 52.1 57.2 Change on year earlier % -11.8 20.0 9.8 Number of German E&E firms that have invested abroad Number 314 331 330 Change on year earlier % -6.3 5.4-0.3 Total FDI into Germany bn 486.7 536.4 548.4 Change on year earlier % 1.4 10.2 2.2 FDI into the German E&E industry bn 28.0 32.9 32.5 Change on year earlier % -21.1 17.5-1.2 Number of German E&E firms into which an investment was made Number 686 741 737 Change on year earlier % 12.6 8.0-0,5 Number of employees in these firms 1,000 268 274 271 Change on year earlier % -10.4 2.2-1.1 Sales volume of these firms bn 90.4 93.0 100.4 Change on year earlier % -14.1 2.9 8.0 ZVEI August 2013 More information: www.zvei.org > Märkte & Recht > Konjunktur & Analysen
Published by: ZVEI - Zentralverband Elektrotechnik- und Elektronikindustrie e. V. (German Electrical and Electronic Manufacturers Association) Economic Policy, Business Cycles and Markets Department Lyoner Straße 9 60528 Frankfurt am Main, Germany Phone: +49 69 6302-258 Fax: +49 69 6302-326 E-mail: gontermann@zvei.org www.zvei.org Edited by: Dr. Andreas Gontermann Jürgen Polzin August 2013 While every care has been taken to ensure the accuracy of this document, ZVEI assumes no liability for the content. All rights reserved. This applies in particular to the storage, reproduction, distribution and translation of this publication. Germany Trade & Invest - Gesellschaft für Außenwirtschaft und Standortmarketing mbh Friedrichstraße 60 10117 Berlin, Germany Edited by: Max Milbredt Phone: +49 30 200 099-408 E-mail: max.milbredt@gtai.com Thomas Bozoyan Phone: +49 30 200099-502 E-mail: thomas.bozoyan@gtai.com