German manufacturers are increasingly directing investments to the US, especially in sectors that use lots of energy and are thus more exposed to higher costs at home, according to the Bundesbank.
Domestic production in industries like chemicals, glass and paper collapsed by 15% in 2022, the year that Russia invaded Ukraine and sent natural-gas prices soaring, the German central bank said Tuesday in a report. At the same time, firms’ direct investments rose particularly strongly in the US, where energy prices are lower.