U.S. Attracting FDI From European Manufacturers
August 15, 2023
Due to record-high energy prices and economic instability in Europe, many European manufacturers are looking to the U.S. market for relief and are considering shifting production to the states. To seize this opportunity and attract foreign direct investment (FDI) for U.S. sites, it is essential to understand the reasons behind this trend and the challenges European companies face when relocating.
The Trend
For over a decade, European companies have been eyeing manufacturing in the U.S. Recent developments induced more and more European companies to plan on expanding their production in U.S. facilities or to relocate their manufacturing to the U.S. altogether — especially for products requiring energy-intensive manufacturing.
Between 2014 and 2020, European FDI in the U.S. increased by over 40 percent, rising to $3.19 trillion in 2021. For instance, 93 percent of German companies plan to grow their U.S. investments in the next three years, with construction, infrastructure, and industrial manufacturing industries leading the charge, according to the German American Chambers of Commerce.