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Foreign Direct Investment Down in Germany in 2022: EY

The number of foreign direct investment (FDI) projects in Germany declined for the fifth year in a row in 2022, according to a survey published on Thursday.

Germany ranked third among European countries with 832 FDI projects registered in 2022, down 1 percent on the previous year, according to the latest Europe Attractiveness Survey released by the global consulting firm Ernst & Young (EY). France and the United Kingdom (UK) were in the top two spots.

Henrik Ahlers, chairman of EY Germany’s Management Board, said that Germany remains a robust and competitive destination. However, he noted that in terms of costs, “Germany has recently become significantly less attractive, especially for industrial companies.”

The United States is enticing investors through the Inflation Reduction Act (IRA), posing a challenge to Germany and Europe in the global competition for attracting investments, the EY report said.

“Business associations therefore warn that German companies are increasingly investing in the U.S.” while foreign firms are avoiding Europe, the German business newspaper Handelsblatt wrote.

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