Survey Reveals German Firms' Intent to Increase Investments in Central and Eastern Europe

A recent survey conducted by the auditing firm KPMG, in collaboration with the Eastern Committee of German Business, indicates a growing interest among German companies in expanding their investments in Central and Eastern Europe (CEE). The study, which involved 133 firms with operations in the region, found that 22% of respondents are considering relocating production processes to these countries.

Poland and Romania emerged as the most significant destinations for these relocations, with Ukraine also gaining attention as an attractive investment site. Over half of the surveyed companies (55%) anticipate that the economic importance of the CEE region will continue to rise by 2030. Andreas Glunz from KPMG noted that the well-known disadvantages of operating in Germany are prompting firms to look abroad for their production needs, with CEE presenting a favored option due to existing substantial investments and familiarity with the market.

The survey indicated that 42% of the participating companies plan to invest in Central and Eastern Europe within the next year, while 56% have investment intentions set for the next five years. Poland, identified as the largest economy in the region, remains the top choice for 51% of German companies, followed closely by Romania at 43%, and Ukraine at 41%, particularly in light of its resilience against Russian aggression.

Key factors influencing investment decisions include domestic demand (40%), the availability of skilled labor (37%), and comparatively low labor costs (33%). However, the surveyed companies also expressed concerns regarding potential risks, such as political instability and security issues (67%), corruption (38%), and bureaucratic obstacles (31%).

Despite these challenges, the current business climate in the region is viewed positively by the respondents, with 45% rating it as good or very good. Additionally, four out of five firms expect that their business outlook will improve over the next five years.