With the increase of energy in Germany, it was only a matter of time before the manufacturing market started adjusting to the new environment. As of 2023, German companies announced 185 capital projects in the United States. 73 of those are in the manufacturing sector. Some of those companies include some of the largest companies in Germany including Volkswagen and BASF.

Like all businesses, German companies tend to go where the business is, the business climate is favorable, and it doesn't hurt if costs are low too. With over 700 million dollars invested into Texas, 33 million into North Carolina, BASF is clearly putting money where they believe the investment will pay them back.

Volkswagen is currently investing about 193 Billion in South Carolina. (Dang, the Carolinas have it going on). This is yet another incredible amount of money moving out of Germany.

These companies could have placed their factories anywhere. If you followed the logic of globalization, you would assume they would be placing their factories someplace cheap, like China. But that is not where they located them. They located their factories in the United States.

What does the US investments tell us? It is further evidence that the world market doesn’t see demand increasing in China. True, we can’t conclude that just from the US investments, although... They are also closing factories in China, but that is another story.

In general, you locate factories near the demand. And locating the factories in the United States tells us quite a lot. It tells us that they expect demand to increase in the US.

Lastly, and this is no surprise, this tells us that the costs to manufacture in Germany are quite significant. You hear people talking about how expensive it is to manufacture in the US. But this move tells us that the cost of manufacturing in Germany is a lot more expensive.