What do German companies have in common with the U.S. economy? A lot, according to the latest report from the German American Chambers of Commerce (AHK USA). The 2024 German American Business Outlook (GABO) reveals the optimism, growth, and innovation of the German business community in the U.S., as well as the challenges and opportunities they face in the election year.

In this blog post, we will summarize and analyze the key findings and implications of the 2024 GABO report, which compiles responses from 224 German subsidiaries in the U.S., reflecting their views and plans for the future of transatlantic economic collaboration. We will discuss the following main points:

• The key highlights of the report, showing the high confidence and performance of the German companies in the U.S.
• The investment and importance of the U.S. market for the global business of the German companies, especially in the manufacturing sector.
• The workforce development and future shoring strategies of the German companies, focusing on training, automation, and digital transformation.
• The challenges and 2024 U.S. elections outlook of the German companies, addressing the issues of skilled labor shortage, immigration policies, and political uncertainty.

Key Highlights

The 2024 GABO report shows that the German companies in the U.S. are optimistic, profitable, and expanding. Here are some of the main highlights of the report:

• 99.5% of German companies in the U.S. do not foresee a U.S. recession in 2024.
• 91% predict net sales growth; 75% expect investment growth in 2024.
• By 2026, 96% plan to invest in the U.S., with over 40% investing more than $5 million and 30% over $10 million.
• 72% aim to expand their workforce in 2024, though 91% face recruitment challenges. By 2028, 82% expect workforce growth.
• Concerns about U.S. inflation, market uncertainty, supply chain issues, and trade tensions have lessened ahead of the 2024 U.S. election.

These highlights indicate that the German companies in the U.S. are confident and resilient, despite the global challenges and uncertainties. They also demonstrate the strong and mutually beneficial relationship between the German and U.S. economies, as the German companies contribute to the growth, innovation, and employment in the U.S. market.

Jan Heck, Chairman of the German American Chambers of Commerce, expressed his excitement over the results of the report, saying:

“The 2024 GABO report depicts a dynamic and innovative German business community in the U.S., ready for growth and advancement. These companies demonstrate resilience and adaptability amid global challenges, committed to investing in workforce development, technological progress, and sustainable practices. Their strategies balance optimism with strategic agility, underpinning the strong German-American economic partnership.”

Investment and Importance of the U.S. Market

The U.S. market plays a significant or dominant role in the global business of the German companies, according to the report. For over two-thirds of the German companies, the U.S. is their most important or second most important market in the world. The U.S. is also the largest export destination for Germany, accounting for 9% of its total exports in 2023.

The German companies are investing heavily in the U.S., especially in the manufacturing sector. According to the report:

• 40% of the German companies have U.S. manufacturing facilities, and 12% plan to build one within three years.
• 19% plan to build their first U.S. manufacturing facility in the next three years.
• 63% of the German companies with U.S. manufacturing facilities plan to expand them in the next three years.

The benefits and opportunities of investing in the U.S. market are manifold for the German companies and the U.S. economy. The German companies can access a large and diverse consumer base, leverage the advanced infrastructure and technology, and benefit from the favorable business environment and tax policies in the U.S. The U.S. economy can benefit from the increased production, innovation, and employment generated by the German companies, as well as the enhanced competitiveness and quality of its products and services.

Workforce Development and Future Shoring

The German companies are not only expanding their workforce, but also investing in their training and development. The report shows that the German companies are committed to providing high-quality jobs and skills to their U.S. employees, as well as aligning their investments with their sustainability goals. The report reveals that:

• 45% of the German companies are investing in personnel development programs, such as apprenticeships, internships, and dual education programs.
• 38% of the German companies are investing in automation and robotics, while 36% are investing in new office spaces and 35% in digital transformation.
• 54% of the German companies are investing in sustainable practices, such as energy efficiency, waste reduction, and carbon neutrality.

The workforce development and future shoring strategies of the German companies are aimed at enhancing their productivity, efficiency, and competitiveness in the U.S. market, as well as improving their social and environmental impact. The German companies are also addressing the challenges and solutions of workforce development and future shoring for the U.S. labor market, such as the skills gap, the aging workforce, the labor mobility, and the diversity and inclusion.

Challenges and 2024 U.S. Elections

The German companies face some challenges in the U.S., especially in recruiting skilled employees. The report indicates that the German companies are struggling to find qualified workers in the U.S., especially in the fields of engineering, IT, and manufacturing. The report states that:

• 91% of the German companies face difficulties in recruiting skilled employees, up from 87% in 2023.
• 57% of the German companies cite skilled labor shortage as their biggest challenge in the U.S., followed by market uncertainty (23%) and supply chain issues (18%).
• 31% of the German companies advocate for changes in U.S. immigration policies, such as increasing the number and availability of visas for skilled workers, and 27% seek more support for apprenticeships, such as tax incentives and public funding.

The German companies are also concerned about the potential political uncertainty and volatility ahead of the 2024 U.S. elections. The report shows that the German companies have shifted their priorities and expectations from the U.S. government and society, compared to the previous years. The report reveals that:

• 49% of the German companies are concerned about the U.S. political situation, down from 61% in 2023.
• 42% of the German companies are concerned about the U.S. trade policy, down from 54% in 2023.
• 37% of the German companies are concerned about the U.S. regulatory environment, down from 43% in 2023.
• The top priorities for the German companies for the U.S. government are controlling inflation (28%), lowering interest rates (25%), reducing taxes (24%), and cutting bureaucracy (23%).

The German companies are preparing for the 2024 U.S. elections by closely monitoring the political developments, diversifying their markets and suppliers, and engaging with the stakeholders and policymakers.

Conclusion

The 2024 GABO report provides a comprehensive and insightful overview of the German business community in the U.S., showing their optimism, growth, and innovation, as well as their challenges and opportunities. The report highlights the strong and mutually beneficial relationship between the German and U.S. economies, as well as the potential for further collaboration and cooperation.