GERMANY 2021
GERMAN COMPANIES AND NEARSHORING
AN EXAGGERATED TREND? In line with Germany’s historical competitiveness strategy, which focuses on quality and not cost when it comes to considering nearshoring, German companies prefer countries that have a reputation for being innovative and having an environment that fosters innovation. This is an important piece of information for Serbian policymakers who hope to attract more FDI by tapping into this trend
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t is widely believed that the COVID-19 lockdowns disrupted global supply chains and pushed many to consider nearshoring. Euler Hermes, a global leader in trade credit insurance, recently surveyed a sample of high-level executives in 1,181 companies in the U.S., the UK, France, Germany and Italy, covering a wide array of industries, from IT, tech and telecoms, machinery and equipment, chemicals, energy and utilities, to the automotive and agrifood sectors. According to the results, between 13 and 18 per cent of French companies consider reshoring in the medium to long term, vs. three to six per cent
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In the recent survey, German companies stated that they might consider nearshoring and that the Western Balkans might benefit from this, but that this remains unclear in Italy and six to 10 per cent in Germany. This is the result of the survey sample showing that 76 per cent of German companies report that less than half of their suppliers are located outside the country, as opposed to an average of 65 per cent for other countries.
German companies said that they’d rather move their production to, or find new suppliers in, Austria, which is likely because a third of German companies’ suppliers are already in Austria. In choosing other countries where they would move their production, about 30 per cent stated that the (selected) country has to have a reputation for being innovative and having an environment that fosters innovation”. This reason shows up among the top three reasons, behind choosing supplier locations. In comparison, only an average of 20 per cent chose the same answer. Marcus How, head of Research & Analysis at ViennEast Consult-
