EY Germany CEO Henrik Ahlers told German broadcaster that "in terms of the costs Germany has clearly lost some of its attractiveness recently, especially for industrial enterprises."
The EY Europe Attractiveness Survey cited Germany’s tight labor pool and high-carbon energy mix as the main deterrents for foreign investors.
The study shows France firmly in the top spot for the fourth year running, on the back of business-friendly reforms. The number of foreign direct investment projects in the country rose by 3% last year to 1,259.
The United Kingdom came second with 929 new projects, down by 6% compared to 2021. EY said investors were discouraged by trade restrictions and labor shortages, which are in part caused by Brexit.
Together, France, the UK and Germany accounted for 50% of the total 5,962 foreign projects created in Europe last year. EY said it remained concerned about Europe’s weak manufacturing performance as rising energy costs, supply chain disruptions and the general slowdown continue weighing down on its economy.