German companies relocating abroad

According to the Federal Statistical Office, about 14% of German companies with at least 100 employees relocated some of their business activities abroad in the period between 2001 and 2006. 4% are at least planning to relocate by the end of the year 2009. About 60% of these companies chose the twelve new EU member states for their new activities.

Second in this list of most preferred locations for relocation came China (36%), followed by the 15 old EU member states (30%). About 38% of companies interviewed mentioned more than one country for relocation. Those activities relocated include for example accountancy, call-centres or parts of production.

Industrial companies are significantly more open (26%) to such relocations abroad than companies from other economic sectors (9%). In particular high-tech companies are prone to relocating: 33% of such companies interviewed relocated. From those companies which provide knowledge-intensive services (consulting firms, software developers) 19% moved business activities abroad.

Most companies made positive experiences when relocating. They improved their competitiveness (73%) and met with lower labour costs (67%). Furthermore, entry into new markets became easier (55%). However, expenditure on logistics also increased (14%).

The effects on the labour market were sometimes contradictory: in those companies interviewed about 188.000 jobs were cut in the period from 2001 to 2006 due to relocation of some business units. At the same time more than 105.000 new jobs were created by these companies in Germany.

The above figures are the findings of an EU-wide survey in the course of which 20.000 companies in Germany operating in almost all sectors were interviewed on the causes, extent and effects of relocation. GERMAN