Berlin - In the eyes of international managers, Germany is capable of withstanding the current economic crisis better than other countries. This is the result of a study on the attractiveness of European markets published today by Ernst & Young. According to the “European Attractiveness Survey”, Germany is the number one location in Europe and number six worldwide.
Ernst & Young surveyed 809 international decision-makers on the attractiveness of the European economic area. An additional 207 foreign companies were asked questions specific to Germany as a business location. Despite the economic crisis, Germany held its position from the previous year. In fact, the managers surveyed asserted that Germany is dealing with the challenges of the crisis better than other European countries.
Based on most business location factors, Germany fares even better than in the previous year. In terms of infrastructure (both telecommunications and logistics), the social climate, the qualifications of its workforce, and the quality of life, Germany receives high marks. When assessing Germany’s future economic development, 37 percent of those surveyed predict a further growth of the location’s attractiveness over the next three years. 86 percent expressed confidence that Germany has the ability to manage the crisis. This is the result of Germany’s innovation capacity and entrepreneurial spirit. Additionally, sector-specific know-how, the existence of large industry clusters, as well as the stability of the banking sector and state assistance for companies, were named as decisive location advantages.
Accordingly, Germany has registered a clearly positive development in terms of foreign direct investment: the number of investment projects in 2008 climbed by 28 percent. “The results of the survey identify the strong trust in this business location. Germany maintains its position as the most attractive investment site in Europe. Even further, Germany is certified as an especially resilient location. Most likely the most important signal of the survey is that investors rely, also long-term, on the stability of Germany as an investment location,” said Michael Pfeiffer, Chief Executive of Germany Trade & Invest, the foreign trade and inward investment promotion agency of the Federal Republic of Germany.
Peter Englisch, Partner at Ernst & Young and author of the study, traces Germany's strong position back to its handling of previous challenges: "It is possible that Germany enjoys such strong trust by foreign companies because the economy has already shown that it is able to successfully rebound from difficult situations in previous years," said Englisch, naming the examples of the handling of German reunification, as well as the reduction of the budget deficit, the Agenda 2010, or the decrease in unit labor costs.
In international rankings, Germany remained - as it was in the previous year's survey - the sixth most attractive investment location. The list is led by China, the USA, and India, followed by Russia, Brazil, and Germany. These results confirm a change in the current trend: unlike in previous years, in which emerging markets increased in attractiveness, Western Europe strengthened its position in the survey. 40 percent of those surveyed named Western Europe one of the leading investment locations worldwide. In comparison, only 33 percent came to this conclusion in 2008. For foreign investors, Western Europe is again the most attractive region worldwide.
In contrast, China and India saw significant losses in the eyes of those surveyed. While 47 percent of the managers surveyed named China the number one location in 2008, this number fell to 33 percent in the current survey. India lost ten percentage points, dropping from 30 percent in 2008 to the current 20 percent.
Contact: Germany Trade & Invest
