European market update - opportunities and growth

Recent years have been good for the European economy. Most all the markets of the EU's 28 members have steadied and demonstrated some solid growth. A few of the markets in Central Europe have been ...
by Hubert Sawicki
Mar 05, 2019

Recent years have been good for the European economy. Most all the markets of the EU’s 28 members have steadied and demonstrated some solid growth. A few of the markets in Central Europe have been particularly strong. Romania is experiencing the fastest growth in the EU at an impressive five percent and is closely followed by Poland, Czechia, and Hungary. These countries boast low unemployment and continued investment, most notably from Germany (world’s 4th largest economy). Germany, has been experiencing quite strong domestic growth and has also been investing heavily in France, which has an appealing industrial base known to embrace innovation. France continues to attract foreign investment projects at unprecedented levels reaching a 10-year high in 2018.

Foreign direct investments (FDI) is a success story across Europe. The largest markets, France and Germany, have about 25 percent of their production activities coming from FDI. The Central European countries also derive a fair amount of their industrial production from FDI. One interesting titbit outside of Europe is that Russia has had about 250 new significant FDI projects per year for the last two years, primarily in manufacturing.

China is working hard to increase its presence in Europe through FDI and is making significant progress in Italy, the UK, and capital-hungry Central Europe. Not surprising, China has become Russia’s No.1 source of foreign investment.

Overall, there is good news for AMT members in Western and Central Europe. Numerous U.S.-controlled manufacturing projects are planned or in need of new capital equipment. Most notably, these are in the aerospace, automotive (tier 2 and 3), machinery engineering, transport, and off-road equipment sectors.

A few interesting statistics:

  • In Germany the U.S. stock of $100 billion was exceeded in 2016 and is still rising

  • United States is the main foreign investor in France

  • U.S. investments are responsible for 220,000 jobs in Poland, a $5 billion economic infusion

  • In both Czechia and Hungary, capital expenditures total $2 billion/year

  • The Nordic countries produced more than 400 U.S. projects in 2017

It is important to note that by conservative estimates, 30 percent of these U.S. investments/projects are in manufacturing and require technology that is supplied by AMT members. That spells OPPORTUNITY! Whether your plan calls for initial market research, channel development, direct sales, logistics assistance, or good ol’ advice, our European office is here to help. 

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Author
Hubert Sawicki
Head of AMT European Office
Born and educated in Poland, had a successful international career. Worked in several European countries, always within and for the engineering commun ...
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