US companies criticize high energy and labor costs as well as corporate taxation in Germany
German investors in the US criticize the low reliability of US politics
Berlin, April 20, 2018 – The American Chamber of Commerce in Germany (AmCham Germany) and Roland Berger will present the results of the Transatlantic Business Barometer 2018 today. The survey shows that the fiscal year 2017 was successful for US companies in Germany. Three-quarters of the companies increased their sales revenue, more than half increased both investments and the number of employees. The outlook for 2018 remains positive: Eighty-two percent of US companies in Germany expect an increase in revenue, more than 50 percent in employees and investments. In addition, 61 percent of the US companies surveyed plan on expanding their activities in Germany over the next three to four years – a significant increase compared to the previous year (55%).
For the first time, German companies in the US were also surveyed this year. The good news: After a positive business year 2017, 80 percent expect sales to rise further in 2018, and 55 percent forecast an increase in both employees and investments. Seventy percent of German companies in the US plan on expanding their activities in the United States over the next three to four years.
“The results show that both Germany and the USA are still highly valued investment locations – despite the current political disputes,” says Bernhard Mattes, President of AmCham Germany. “Germany attracts US companies with its stable economy and strong domestic consumption. On the other side of the Atlantic, measures such as the US tax reform have made the United States more attractive to German investors.”
Germany: Great quality, but high costs
The vast majority of US companies in Germany (91 percent) give the location very good or good grades. Germany’s well-trained employee base, its potential as a sales market and the quality of its physical infrastructure and research and development are all rated as good or very good by more than three-quarters of respondents.
As pleasing as these results may be, US companies believe there is still room for improvement in Germany. Almost 60 percent of those surveyed criticize the high energy costs, more than 30 percent criticize labor costs and corporate taxation. Investors also see the need for action with regard to digital infrastructure and the conditions for startups and entrepreneurship – a mere one-third of US companies rate these factors as good or very good.
The US: High incentives, but a challenging political situation
Two-thirds of German investors in the US give the investment location good or very good grades. In addition to the United States’ potential as a sales market (84 percent), German investors particularly value its corporate taxation (71 percent), environment for startups and entrepreneurship (69 percent) and the quality of its digital infrastructure (61 percent).
However, these positive results are clouded by challenges regarding planning security. Only 38 percent of German companies rate the ability to predict investment conditions in the US as good or very good. Just over half criticize the unreliability of US politics.
According to Mattes: "The stability of transatlantic business relations must not be put at risk. Protectionist measures such as the announcement of unilateral import tariffs contribute to business uncertainty and are a step in the wrong direction. Both company representatives and political actors must work together for free and fair trade and engage in dialogue. The Transatlantic Business Barometer clearly confirms that our strength lies in German-American cooperation. Germany can learn a lot from the IT affinity and entrepreneurial spirit of the US, but also serves as a role model for the United States given its dual system of vocational training.”
About the Transatlantic Business Barometer
The Transatlantic Business Barometer is an exclusive survey among US investors in Germany and German investors in the US. For 15 years, AmCham Germany has surveyed US companies for its Business Barometer. This year, the survey was expanded to include German companies in the US, thereby providing a more complete transatlantic perspective.
This year’s Transatlantic Business Barometer is based on the results of 84 companies, among which are 39 US companies in Germany and 45 German companies in the US. The survey was conducted in February 2018.
About AmCham Germany
The American Chamber of Commerce in Germany (AmCham Germany) is the voice of transatlantic business. We strive to enhance global economic and trade relations built on a strong foundation of American and German partnership. We actively support and promote our members' interests through our global networks in business, politics and AmChams worldwide. AmCham Germany enables cross-cultural understanding, cooperation and new investment through our commitment to transparent dialogue, unrestricted trade and a competitive and open business climate.
Roland Berger, founded in 1967, is the only leading global consultancy of German heritage and European origin. With 2,400 employees working from 35 countries, we have successful operations in all major international markets. Our 52 offices are located in the key global business hubs. The consultancy is an independent partnership owned exclusively by 230 Partners.
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