• VDMA survey: market size and growth are the main reasons for US investments
• Many companies expect double-digit sales growth in US business
• VDMA member companies employ more than 100,000 people in the United States
• Increasing number of trade barriers causes concern

Washington, 15/09/2022 – The United States is not only the largest single export market for machinery and equipment manufacturers from Germany. Many companies also have a strong presence in the United States and are planning to expand it. A recent survey in which around 350 VDMA member companies participated shows that around a third of them already manufacture in the USA. Three quarters of all respondents intend to expand business activities in the U.S. this year and next. Around two-thirds of them want to strengthen their own service and sales, 37 percent are planning to expand their production, and 18 percent also want to expand design and development in the USA. According to the survey, two-thirds of the companies plan to increase their local workforces for this purpose. German mechanical engineering companies currently employ an estimated 100,000 people in the United States.  

“The United States has long been a market of enormous importance for machine builders from Germany and Europe. Both the size of the market and the growth prospects, as well as the increasing geopolitical tensions, make it attractive to have a direct local presence,” said VDMA President Karl Haeusgen during talks with U.S. congressmen and decision-makers from the Biden administration in Washington.

The expansion plans are also accompanied by expectations of rising sales. A good 40 percent of the companies surveyed expect a nominal increase of more than 10 percent in their US business in 2022, with a further good 40 percent expecting growth of up to 10 percent. Expectations for the coming year are similar: 37 percent of the companies anticipate a further nominal increase in sales of more than 10 percent, while 48 percent expect growth of up to 10 percent.

The United States has long been a market of enormous importance for machine builders from Germany and Europe.

Karl Haeusgen, President of VDMA

Foreign Direct Investment: Germany moves up to second place 
Current figures from the U.S. Department of Commerce on foreign direct investment also show how important the U.S. is for German industry as a whole. According to these figures, the total volume of German direct investment in the United States reached $636 billion at the end of 2021 – an increase of 21 percent compared with the figure at the end of 2020. In the ranking of the most important investors, Germany has thus moved past Canada into second place, while Japan remains the frontrunner. Companies from Germany employ an estimated one million people in the United States.

In the survey, mechanical engineering companies cited market size (86 percent) as the most important reason for expansion in the USA. 64 percent of the companies want to invest in the USA because they expect market growth there, 55 percent emphasize proximity to the customer. As many as 16 percent want to circumvent so-called “buy American” clauses; in other words, trade hurdles that are intended in part to force local production in the U.S. in the case of government-funded infrastructure projects. “Trade hurdles have unfortunately increased in recent years on the U.S. side toward Europe as well. This is hurting companies on both sides of the Atlantic. Both European machine builders and their U.S. customers would benefit if industrial tariffs were eliminated, conformity assessments were mutually recognized and, above all, no further trade barriers were erected,” Haeusgen emphasized.