ERNST & YOUNG SRL

  |  06.02.2013

Germany attractiveness survey

There is a dramatic, growing distinction between the public perception of Europe’s prosperous north, with Germany at its center, and the debt-ridden southern member states.

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 Germany is a driving force for the economies of its neighbors via close trading links with them. Due to their weak industrial sectors, however, southern countries cannot benefit from Germany’s robust economic development or the ongoing boom in emerging markets. There is no obvious solution to this structural problem.

 

Germany’s strength creates the expectation that it will contribute to solving the European crisis, but is its strength sometimes overestimated. The attractivity and competitiveness of the German market is the objective of the new study launched today by Ernst & Young, A pillar of strength in troubled times – Germany attractiveness survey.

 

Germany ranks 1st most attractive FDI location in Europegraphic attached

 

As by far the highest-ranking European location, Germany has gained one percentage point to 13%, but has slipped from fifth to sixth place overall having been overtaken by Russia this year. Having weathered the crisis, Germany is the only Western country to have positioned itself as a top global business location. The United Kingdom and France lie far behind Germany in the opinions of investors — not just on this global ranking, but also on perceived favorability for development opportunities. When asked which European business locations will be the most attractive over the next three years, more than one-half of those polled (56%) cited Germany, with only a quarter naming France or the United Kingdom.

 

The foundations of Germany’s attractiveness for FDI

 

After years of economic and social reform, leading to greater competitiveness and a more flexible labor market, the German economy is extremely flexible and resilient. This is now being acknowledged abroad, setting Germany apart from many other European countries in the eyes of foreign investors.

 

Foreign investors rate the infrastructure in Germany more highly than anything else. Of those polled, 88% described Germany as an attractive business location in terms of its transport infrastructure, with 60% rating it as very attractive. The telecommunications infrastructure rated only slightly less positively and Germany also scored particularly well on workforce skill and social climate. Germany has slightly improved on all of these factors since 2011.

 

Germany has made a significant leap in the area of “stability and transparency of the political, legal and regulatory environment”. Its approval percentage on this factor, which is one of the three most important in the eyes of investors, has risen from 72% to 80%. The attractiveness of the internal market — the most important criterion for a business location — was also rated more positively than in 2011 (increasing from 72% to 77%).

 

A remarkable increase in satisfaction can also be seen in the area of personnel and labor costs. In the previous year, 34% of respondents gave Germany a good rating — this figure is now 49%. The percentage of those who consider Germany to be “less attractive” or not at all attractive in this respect has simultaneously fallen from 55% to 41%. It remains to be seen whether, and if so how, the higher wage settlements expected for this year will affect the survey results in 2013.

 

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COMMENT ON THIS ARTICLE:

  • Dawid
    17.06.13 ora 03:56
    RxfPWhtnPvwXiwrY

    I envy you for having the oonprtupity to meet Henry Allingham, Tom!I am glad too that the veterans' stories have been recorded for posterity. It is fortunate that their experiences. What they saw should never be forgotten. Hopefully one day we as a species will learn from them and change our ways. I know that sounds pretty naive but unless we do we have no future.





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