TRANSATLANTIC

BusinessBarometer

2023

Howcompaniesrate

GermanyandtheU.S.asinvestmentlocations

Roland

Berger

AmchamGERMANY

TheAmChamGermanyTransatlanticBusinessBarometerisanexclusivesurveyamongU.S.investorsinGermanyandGermaninvestorsintheU.S.

Thesurveyprovidesawell-foundedanalysisofinvestmentsentimentaswellasabusinessassessmentofbothcountries.

Forover17years,U.S.companieshavebeensurveyedaspartoftheAmChamGermanyBusinessBarometer.

Asintheprevioussixyears,GermancompaniesintheU.S.werealsosurveyedthisyear.

Coverillustrationpolygraphus/iStock

TransatlanticBusinessBarometer20233

HowU.S.companiesviewGermanyasaninvestmentlocationin2023

Germanyinearly2023.IncreasedenergycostsandgeopoliticaluncertaintyasaresultoftheRussianinvasionofUkrainecontinuetodominateeventsinGermany.Nevertheless,morethantwo-thirdsofU.S.companiesinGermanyreportedanincreaseinrevenuein2022.However,theoutlookforthecurrentyearissubduedandoneinthreeU.S.companiesratetheconditionsfordoingbusinessinGermanyasgood.Inparticular,therespondentsseenegativesinthecostburdenforcompanies,digitalinfrastructureandtheavailabilityofskilledworkers.

1.T.DIN–ITANCES

ThepastyearwasrobustformanyU.S.companiesinGermany–despitethewarinUkraine,inflationandtheshiftininterestrates.

Howdidtheyear2022turnoutforyourcompanyinGermany?[%]

21

11

Revenue

68

43

15

Employees

42

49

9

Investments

42

IncreaseConsistentDecrease

4TransatlanticBusinessBarometer2023

2SUBDUEDOUTLOOKFORTHECURRENTYEAR

OnlyabouthalfofU.S.companiesinGermanyexpectrevenuegrowthin2023.

Revenue

Employees

Investments

Howwillyourrevenue,employeenumbersandinvestmentsinGermanydevelopin2023?[%]

53

23

24

33

40

27

42

43

15

IncreaseConsistentDecrease

EXPECTATIONSFOR2023BELOWLASTYEAR'SGOODRESULTS

Afterlastyearturnedoutbetterthanpreviousyears–atleastintermsofrevenue–expectationsforbothrevenueandemployeesaredecreasing.

Percentageofcompaniesthatexperiencedanincreaseinrevenue,numberofemployeesandinvestmentsfortherespectiveyear(2017–2022)oranticipatethisin2023

77%

75%

60%

45%

30%

68%

64%

61%

55%

58%

53%

47%42%

45%

51%

50%

55%

42%32%44%42%42%.36%33%

28%

15%

0%

2017201820192020202120222023

RevenueEmployeesInvestments

TransatlanticBusinessBarometer20235

3

MAJORITYOFU.S.COMPANIESWILLCONTINUETOCOUNTONGERMANYINTHEFUTURE

SlightlymorethanhalfoftheU.S.companieswouldliketoexpandtheiractivitiesinGermanyoverthenextthreetofouryears.

Willyouexpand,maintainorreduceyouractivitiesinGermanyoverthenextthreetofouryears?

53%

planonexpandingtheiractivities

2022:61%

35%

planonmain-

tainingtheir

presentactivities2022:33%

12%

planonreducingtheiractivities2022:6%

6TransatlanticBusinessBarometer2023

4

GERMANYLOSESATTRACTIVENESSASABUSINESSLOCATION

OnlyoneinthreeU.S.companiesstillseesGermanyasagoodbusinesslocation.Alookintothefuturealsorevealsaneedforaction:Aroundaquarterofthosesurveyedexpectconditionsinthecountrytodeterioratefurther.

HowwouldyouratethecurrentinvestmentconditionsinGermany?

34%

Verygoodorgood2022:59%

38%

Badornotsogood2022:8%

28%

Neutral

2022:33%

HowwillinvestmentconditionsinGermanydevelopoverthenextthreetofouryears?

26%

ni

improve

2022:43%

Conditionswill

worsen2022:16%

36%

Conditionswillstaythesame

2022:41%

TransatlanticBusinessBarometer20237

5

GERMANYCHECK:

EXCELLENTWORKFORCE,HIGHCOSTS

Thequalityoftheworkforce,suppliernetworksandthehighqualityofR&DarehighlyvaluedbyU.S.companies.However,almosthalfofallrespondentsseedifficultiesaroundtheavailabilityofskilledemployees.Furthermore,companiesseethemosturgentneedforimprovementinfinancialburdensanddigitalinfrastructure.

Howwouldyouratethefollowinginvestmentconditions?[%]

Qualityofemployees

Qualityofsuppliernetworks

QualityofR&D

Marketopenness

Potentialasasalesmarket

Visaissuance

Qualityofinfrastructure(transportation,energy,etc.)

Overallreliabilityofpolitics

Availabilityofskilledemployees

94

6

3

68

29

68

26

6

64

30

6

50

41

9

45

43

12

44

30

26

38

38

24

36

19

45

8TransatlanticBusinessBarometer2023

EnergycostshavegenerallybeenapressingissueinGermany.InthewakeofthewarinUkraine,theimportanceofthisissuehasincreasedevenfurtherandhasbeenextendedtoincludetheaspectofenergysecurity.

32

33

35

Predictabilityof

investmentconditions

26

39

35

Economicandindustrialpolicy

24

32

44

Startupenvironmentandentrepreneurship

21

38

41

R&Dregulatoryenvironment

21

32

47

Qualityofdigitalinfrastructure

12

44

44

Corporatetaxation

9

38

53

Laborcosts

21

79

Energycosts

Verygood/goodNeutralBad/notsogood

TransatlanticBusinessBarometer20239

6

U.S.COMPANIESSEEROOMFORIMPROVEMENTINTRANSATLANTICTRADEANDBUSINESSRELATIONS

U.S.companiesfeelthattransatlantictradeandbusinessrelationscouldbeenhanced.Companiesseethemosturgentneedforactionintheareasoftradeliberalization,digitalpolicyandtaxes.

Howwouldyouratetransatlantictraderelationsinthefollowingareas?[%]

13

49

38

Progressintransatlantictradeliberalization

23

51

26

Coordinatedpositiontowardsmultilateral

institutions(e.g.WTO)Commonapproach

25

53

22

towardsdiscriminatorytradepractices

16

68

16

Tariffs

16

68

16

Non-tarifftradebarriers

Verygood/goodNeutralBad/notsogood

Howwouldyouratetransatlanticbusinessrelationsinthefollowingareas?[%]

12

49

39

Digitalpolicy

6

64

30

Tax

16

56

28

Energy&climate

21

61

18

Healthcare&lifesciences

24

67

9

Aerospace&defense

Verygood/goodNeutralBad/notsogood

10TransatlanticBusinessBarometer2023

7

U.S.COMPANIESREMAINCALMINTHEFACEOFPOTENTIALTRADE-DISTORTINGMEASURES

OnlyaminorityofU.S.companiesinGermanyareconcernedaboutmeasuresthatcouldaffecttrade.

Howconcernedareyouaboutthepotentialimpactoftrade-distortingmeasuresdiscussedintimesofgeneralglobaluncertainty(e.g.discussionsabouttheU.S.InflationReductionActandrespective"rebalancingmeasures"bytheEU)?[%]

Somewhatconcerned

42

410

17

Less/

notconcerned

NeutralVery

concerned

8

TRANSATLANTICSOVEREIGNTY:COOPERATIONONECONOMICPOLICYANDSECURITYISSUESISTHE

TOPPRIORITY

U.S.companiesinGermanyseestrongerjointpositioningoneconomicpolicyissuesandgreatercooperationonstrategicsecurityissuesasthemostimportantareasfortransatlanticaction.

Inyourview,whichthreeofthefollowingactionsmustbepursuedthemostinordertostrengthentransatlanticsovereignty?1[%]

67

Strongjointtransatlanticpositioningoneconomicpolicyissues

61

Transatlanticcollaborationonstrategicsecurityissues

45

Commontransatlanticdigitalregulation

42

CreationofaDigitalTransatlanticEconomicZone

36

Abolitionofalltradebarriers

36

Creationofanenergypartnership

12

Establishmentofajointtransatlanticsemiconductorstrategy

1Respondentscouldspecifythreeareas.

TransatlanticBusinessBarometer202311

9

INCREASEDENERGYPRICESHAVELITTLEIMPACTONCURRENTBUSINESSACTIVITIESINGERMANY

WhilethevastmajorityofU.S.companiesdonotexpectanychangesintheirbusinessoperationsasaresultoftheenergycrisis,theoutlookforfutureinvestmentsismorecomplex.One-thirdofcompaniesplantoreduceorhaltinvestmentactivity,while9%intendtoincreaseinvestments,e.g.intheareaofenergymodernization.

WhatconsequenceswilltheriseinGermanenergypriceshaveonyourcurrentoperationsinGermany?[%]

19%

Decreaseinoperations

Inc0rea

operations

a

inoperations

WhatconsequenceswilltheriseinGermanenergypriceshaveonyourplannedinvestmentsinGermany?[%]

6%

(Temporary)haltof plannedinvestments

9Incr

planned

investments

c

ofplannedinvestments

58%

Noimpactonplannedinvestments

12TransatlanticBusinessBarometer2023

TransatlanticBusinessBarometer

HowGermancompaniesview

theU.S.asaninvestmentlocationin2023

TheU.S.inearly2023.ThecurrentmoodintheU.S.isdominatedbyinfla-tionandthemonetarypolicyoftheU.S.FederalReserve.Nevertheless,GermancompaniesintheU.S.canlookbackonasoundyearin2022,andexpectationsforthecurrentyeararealsomoderatelypositive.Ingeneral,themajorityofGermancompaniescontinuetoregardtheU.S.asagoodbusinesslocation.Inadditiontotransatlanticbusinessrelations,companiesseeroomforimprovementaboveallintheavailabilityofskilledemployees,visaissuanceandthereliabilityofpolitics.

1IINTHEU.S.–SOUND

MorethanhalfofGermancompaniesintheU.S.increasedtheirrevenuelastyear.Intermsofemployeesandinvestment,thepastyearwasalsosoundforthevastmajorityofcompanies.

Howdidtheyear2022turnoutforyourcompanyintheU.S.?[%]

21

21

Revenue

58

48

5

Employees

47

48

5

Investments

47

IncreaseConsistentDecrease

14TransatlanticBusinessBarometer2023

2

MODERATELYPOSITIVEEXPECTATIONSFORTHECURRENTYEAR

Morethantwo-thirdsofGermancompaniesintheU.S.expectrevenuetoriseinthecurrentyear,andaroundhalfofthemexpectinvestmentandemploymenttoincrease.

Revenue

EmployeesInvestments

Howwillyourrevenue,employeenumbersandinvestmentsintheU.S.developin2023?[%]

70

21

9

53

36

11

50

45

5

IncreaseConsistentDecrease

ECONOMICRECOVERYCONTINUES

Aftertheslumpin2020,theproportionofcompaniesreportingrisingrevenue,investmentsandemployeeshasincreasedintheyearssince.Revenueandemploymentareexpectedtoincreasefurtherinthecurrentyear.

Percentageofcompaniesthatexperiencedanincreaseinrevenue,numberofemployeesandinvestmentsfortherespectiveyear(2017-2022)oranticipatethisin2023.

75%

56%

60%

53%

46%

45%

30%

15%

0%

70%

59%

59%

58%

53%

52%

41%

47%

50%

39%

47%

35%

37%

25%

33%

32%

14%

13%

2017

Revenue

2018

Employees

2019

Investments

2020202120222023

TransatlanticBusinessBarometer202315

3CONTINUOUSGROWTH

ThreeoutoffouroftheGermancompaniessurveyedintendtofurtherexpandtheiractivitiesintheU.S.inthemediumterm.

Willyouexpand,maintainorreduceyouractivitiesintheU.S.overthenextthreetofouryears?

74%

planonexpandingtheiractivities

2022:89%

26%

planonmain-

tainingtheir

presentactivities2022:11%

0%

planonreducingtheiractivities2022:0%

16TransatlanticBusinessBarometer2023

4

DOINGBUSINESSINTHEU.S.:EVENBETTERINTHEFUTURE

ThemajorityofGermancompaniesalreadyviewtheU.S.positivelyasabusinesslocation,andalmosttwo-thirdsofthosesurveyedevenexpecttheconditionstheretoimprovefurther.

HowwouldyouratethecurrentinvestmentconditionsintheU.S.?

9%

Badornotsogood2022:0%

1e

2022:22%

74%

Verygoodorgood2022:78%

HowwillinvestmentconditionsintheU.S.developoverthenextthreetofouryears?

29%

Conditionswillstaythesame2022:37%

8%

Conditionswill worsen2022:5%

63%

Conditionswillimprove

2022:58%

TransatlanticBusinessBarometer202317

5

U.S.CHECK:ATTRACTIVEBUSINESSLOCATIONWITHFEWWEAKNESSES

ThemanystrengthsoftheAmericanmarketarehighlyvaluedbyGermancompanies.Inparticular,thepotentialasasalesmarketandenergycostsareviewedpositively.

Howwouldyouratethefollowinginvestmentconditions?[%]

96

4

Potentialasasalesmarket

78

22

Energycosts

74

22

4

Startupenvironmentandentrepreneurship

70

21

9

Economicandindustrialpolicy

61

30

9

Qualityofdigitalinfrastructure

61

26

13

QualityofR&D

61

39

R&Dregulatoryenvironment

57

43

Corporatetaxation

52

35

13

Qualityofsuppliernetworks

18TransatlanticBusinessBarometer2023

GermancompaniesintheU.S.seepotentialforimprovementintheavailabilityofskilledemployees,theoverallreliabilityofpoliticsandvisaissuance.

52

18

30

Qualityofemployees

52

26

22

Predictabilityof

investmentconditions

48

22

30

Qualityofinfrastructure(transportation,energy,etc.)

48

35

17

Marketopenness

30

35

35

Availabilityofskilledemployees

26

35

39

Overallreliabilityofpolitics

23

27

50

Visaissuance

22

56

22

Laborcosts

Verygood/goodNeutralBad/notsogood

TransatlanticBusinessBarometer202319

6

TRADEANDBUSINESSRELATIONSMUSTBEINTENSIFIED

GermancompaniesintheU.S.wouldliketoseefurtherprogressintransatlantictraderelations.Transatlantictradeliberalizationandcoordinationwithmultilateralinstitutionsareprogressingtooslowly.

Howwouldyouratetransatlantictraderelationsinthefollowingareas?[%]

8

21

71

Coordinatedpositiontowardsmultilateralinstitutions(e.g.WTO)

429

67

Progressintransatlantictradeliberalization

8

38

54

Tariffs

Commonapproach

8

38

54

towardsdiscriminatorytradepractices

13

49

38

Non-tarifftradebarriers

Verygood/goodNeutralBad/notsogood

Howwouldyouratetransatlanticbusinessrelationsinthefollowingareas?[%]

17

40

43

Healthcare&lifesciences

25

37

38

Energy&climate

17

45

38

Tax

21

46

33

Digitalpolicy

42

45

13

Aerospace&defense

Verygood/goodNeutralBad/notsogood

20TransatlanticBusinessBarometer2023

7

GERMANCOMPANIESVIEWTRADE-DISTORTINGMEASURESWITHCONCERN

ThevastmajorityofGermancompaniesintheU.S.areconcernedaboutmeasuresthatcouldaffecttrade.

Howconcernedareyouaboutthepotentialimpactoftrade-distortingmeasuresdiscussedintimesofgeneralglobaluncertainty(e.g.discussionsabouttheU.S.InflationReductionActandrespective"rebalancingmeasures"bytheEU)?[%]

Neutral

4

8

50

38

Less/

notconcerned

Somewhatconcerned

Very

concerned

8

TRANSATLANTICSOVEREIGNTY:COOPERATIONONECONOMICPOLICYANDTHEREMOVALOFTRADE

BARRIERSISINTHEFOREGROUND

GermancompaniesintheU.S.alsoseejointtransatlanticpositioningoneconomicpolicyissuesasatoppriority.Theremovaloftradebarriersandtransatlanticcooperationonsecurityissuesareparticularlyimportant

fromtheperspectiveofGermancompanies.

Inyourview,whichthreeofthefollowingactionsmustbepursuedthemostinordertostrengthentransatlanticsovereignty?1[%]

71

Strongjointtransatlanticpositioningoneconomicpolicyissues

63

Abolitionofalltradebarriers

58

Transatlanticcollaborationonstrategicsecurityissues

33

Commontransatlanticdigitalregulation

29

Creationofanenergypartnership

29

Establishmentofajointtransatlanticsemiconductorstrategy

17

CreationofaDigitalTransatlanticEconomicZone

1Respondentscouldspecifythreeareas.

TransatlanticBusinessBarometer202321

9

ENERGYPRICESMAKETHEU.S.MOREATTRACTIVEFORGERMANCOMPANIES

One-thirdofGermancompaniesindicatedthattheyare(more)inclinedtorelocatepartsoftheirproductiontotheU.S.duetotheenergysupplysecurityandthepricesituationintheU.S.

InlightoftherecentriseinenergypricesinGermany,doestheU.S.'senergysecuritymakeyourparentcompanymoreinclinedtorelocateproductiontotheU.S.?[%]

35%

Very/somewhatinclinedto

relocatetotheUS

9%

Very/somewhatdisinclinedto

relocatetotheUS

22TransatlanticBusinessBarometer2023

AboutAmChamGermany

TheAmericanChamberofCommerceinGermany(AmCham

Germany)isthevoiceoftransatlanticbusiness.Westriveto

enhanceglobaleconomicandtraderelationsbuiltonastrong

foundationofAmericanandGermanpartnership.Weactively

supportandpromoteourmembers'intereststhroughourglobalnetworksinbusiness,politicsandAmChamsworldwide.AmChamGermanyenablescross-culturalunderstanding,cooperationandnewinvestmentthroughourcommitmenttotr