Many German businesses are increasingly looking to move parts of their production to Central and Eastern Europe, drawn by the region’s economic potential and proximity to home. According to a recent survey by KPMG and the Eastern Committee of the German Economy (OA), over 20% of companies plan to shift operations there. More than half (55%) expect the region to become even more economically significant by 2030.
Poland, the largest economy in the area, is the top investment choice, followed by Romania and Ukraine. Hungary and the Czech Republic also attract interest. Over half (56%) of surveyed companies plan to invest in the region within the next five years.
Key Advantages and Challenges
The availability of skilled professionals is a major draw, with 37% of businesses citing it as a reason for relocating. High local demand (40%) and lower labor costs (one-third of respondents) are also significant factors. Despite the ongoing war, Ukraine is viewed as a promising hub for energy, manufacturing, IT, and outsourcing, according to Eastern Europe expert Nicolai Kiskalt.
However, geopolitical instability remains a major concern. Two-thirds of surveyed firms cite political risks and security issues as key challenges. Corruption (38%) and bureaucracy (31%) are also seen as obstacles. The survey included 133 companies currently operating in the region.
