German companies plan more U.S. investment in 2023 - survey

FILE PHOTO: VW re-starts Europe's largest car factory after coronavirus shutdown

BERLIN (Reuters) - German companies plan to invest more in the United States in 2023, with the auto, transport and logistics sectors likely to be the biggest beneficiaries, a survey released on Wednesday showed.

The German American Business Outlook survey, which had more than 200 respondents, found that 72% planned to increase U.S. investment this year, with 22% of companies planning to spend more than $10 million.

Among German companies that already have subsidiaries in the U.S., 93% of respondents said market size and customer demand are the key criteria in selecting their investment location. Proximity to clients was cited by 71% of those surveyed as a reason to invest, while 44% chose market stability.

U.S. President Joe Biden last year signed into law the $369 billion Inflation Reduction Act, leading to fears in Europe that companies would be tempted to the United States, however, only 17% of respondents said it was a factor.

In the survey, 51% of the companies said the IRA and related Buy American rules did not have an impact on their investment decisions.

Volker Treier, trade chief at the German Chambers of Commerce and Industry (DIHK), said the U.S. remains the most important trading partner for Germany.

"Yet we are also in a tough competitive battle, not just in Germany and Europe, but all over the world. What's needed now is a fair playing field, not protectionist foreclosure," Treier said.

The main challenges in 2023, according to the companies surveyed, are finding skilled workers, cost increases and supply chain problems.

(Reporting by Reinhard Becker; Writing by Maria Martinez; Editing by Sharon Singleton)