According to a recent survey of 300 German manufacturers from the German Machine Building Association, 54 percent of companies plan to relocate some of their production out of the country within the next 3 years; 55 percent of the firms plan to cut jobs this year. "High taxes and pension contributions in Germany are causing more and more companies to move abroad," says Diether Klingelnberg, the association’s president, predicting that "the number of companies going abroad will double."

German companies are being attracted by improved technical know-how and a relative lack of bureaucracy in Eastern Europe and Southeast Asia. Austria and Switzerland have also increased efforts to attract German manufacturers.