German companies are continuing to move abroad — and that applies to businesses of every size. According to press reports, Gardena, the Ulm-based garden tools specialist, plans to cut 250 jobs in Germanyand partially relocate operations to the Czech Republic. That amounts to a reduction of 10% of its domestic workforce.

Major global players such as BASF are also continuing to invest abroad. Earlier this year, it become known that the chemical company intends to relocate service positions to India, with many jobs at its Berlin site coming under particular pressure.

Relocations and job losses

Last year, the situation was described in even more dramatic terms.

"Germany's industrial crisis is running at full speed," wrote the online magazine Finanzmarktwelt in November, citing figures from the Federal Statistical Office from 2018 to 2023. More recent figures have yet to be published by the office.

According to the data, around 1,300 German companies with more than 50 employees relocated business functions abroad between 2021 and 2023. That's equivalent to 2.2% of all companies of that size based in Germany in 2023.

These relocations are said to have cost approximately 50,800 domestic jobs. Many feared this trend would continue or even accelerate, given Germany's high energy and labor costs.

However, Germany's state-owned development bank KfW is already observing a different trend. In June, its research department announced that: "Many medium-sized companies are withdrawing from international business." According to the bank's findings, the number of German medium-sized companies who were active abroad dropped from around 880,000 in 2022 to some 760,000 a year later.

"The general conditions for foreign trade have deteriorated significantly," said Dirk Schumacher, KfW's chief economist, attributing this to "geopolitical tensions in Ukraine and the Middle East, growing export competition from China in key industries and the protectionist trade policy of the United States."

Consistently inconsistent

A rather different picture is painted by the Association of German Chambers of Commerce and Industry (DIHK).

Referring to its business climate survey from early 2026, DIHK spokesman Sven Ehling said cost pressures on German industry had reached a record high, prompting many companies to plan greater investments abroad.

According to DIHK, 43% of industrial companies are planning foreign investments this year, three percentage points higher than the previous year. "The reasons are clear: rising costs, structural problems and weak economic conditions in Germany as a business location," said DIHK's head of international trade, Volker Treier.

Changing reasons for investing abroad

In the past, foreign investment tended to strengthen domestic operations, leading to greater employment at home. This was particularly true of investments aimed at opening new markets or expanding sales and customer service. However, the share of German companies investing abroad primarily for market development is falling, according to the DIHK survey, from 30% to 28%.

"Companies are now being forced to invest abroad primarily for cost reasons. This frequently leads to significant cutbacks at domestic sites," said Treier. Foreign investment is now helping to cut costs, rather than drive expansion.

Overall, the trend in foreign investment is far from clear-cut. The current situation resembles more of a sideways move. According to Professor Steffen Müller of the Leibniz Institute for Economic Research Halle (IWH), direct investments abroad by German companies are "well below peak levels."

The Bundesbank statistics, Müller told DW, show annual transaction values of €120 billion between 2017 and 2022. By contrast, the figures for 2024 stand at €80 billion, and for 2025 at under €100 billion. These numbers give "little reason to assume that significantly more capital is flowing out than in previous years."

America loses, Asia gains

The survey reveals significant shifts in the target regions for German foreign investment. North America in particular is losing appeal, with the share of German companies planning investments there falling from 48% to 44%.

At the same time, engagement in Asia is growing. According to the DIHK, the share of industrial companies investing in China is rising from 31% to 34%. The Asia-Pacific region (excluding China) is also gaining in importance, growing from 21% to 26%.

"The tariff dispute with the United States is fueling uncertainty and causing companies to postpone decisions," said Treier.

With 64%, the eurozone remains the most important region for German companies to invest in. Stability, the common single market and the shared currency offer reliable framework conditions — a particularly important factor in investment decisions during times of geopolitical uncertainty, the DIHK representative noted.

This piece was originally published in German.