EIB Investment Survey 2025: German firms stay on course with investment, AI and green transition in a challenging environment

This article is published in association with European Investment Bank.

• German firms keep investing in green, digital and skills – leveraging the EU single market to stay globally competitive.
• Strong on AI, strong on exports: Germany’s innovators and hidden champions match EU and US leaders while stepping up green investment.
• From energy costs to skills gaps: companies continue to invest through uncertainty, with the EIB Group and TechEU backing future‑proof industrial and SME growth.

Nearly nine in ten German firms continue to invest despite geopolitical uncertainty, high energy prices and skills shortages, underlining the strength of the EU single market and Germany’s role as a global industrial and innovation hub. The latest EIB Investment Survey 2025 for Germany shows that companies are using this investment to drive the green and digital transitions, while at the same time adjusting to cost pressures and a weaker macroeconomic outlook.

German firms remain highly active investors, with an even higher investment rate than the EU average, although the share of companies planning to increase investment is now at its lowest level in five years. Investment is still tilted towards replacement, with around two thirds of total investment going into renewing existing capacity, a higher share than in the EU overall, but firms are also directing substantial resources into green technologies, digitalisation and skills to strengthen competitiveness.

At the same time, German companies are global in outlook and deeply integrated into international trade, acting as “hidden champions” in specialised niches and advanced manufacturing value chains. Compared to the EU average, they are more likely to invest in digital tools to manage supply chains and international operations, reflecting Germany’s position as an export-oriented economy within the EU single market.

Vice-President Nicola Beer said: “German firms are continuing to invest and transform their business models, even under difficult conditions. The EIB Investment Survey 2025 shows that companies are pushing ahead with AI, innovation and the green transition, and are using the strengths of the EU single market to stay competitive globally. Our role as the EU bank is to support this shift with long-term financing and advisory services, so that German and European firms can translate today’s investments into tomorrow’s productivity and quality jobs.”

EIB Chief Economist Debora Revoltella said: ““The geopolitical context is slowing investment expectations across Europe, with export-focused economies such as Germany feeling the impact most strongly. Nevertheless, corporate investment has remained resilient. EU firms are concentrating on boosting efficiency, diversification, and supply-chain security. At the same time, uncertainty, shortages of skilled workers, and high energy costs continue to weigh on businesses across the Union. In this environment, deeper market integration and regulatory simplification are emerging as key drivers of potential upside opportunities.”

Positive signals on AI and innovation

German companies are embracing artificial intelligence at scale, with close to 40% of firms reporting AI use and adoption rates among large companies in line with EU leaders and on par with US firms. Usage of generative AI is broadly similar to the EU average, and German firms are already applying AI slightly more intensively than the EU average in areas such as customer service, marketing and sales, showing that AI is becoming a practical business tool rather than a distant technology.

However, the survey also indicates that innovation and expansion could be more ambitious, with only around 14% of German firms planning to prioritise investment in new products or processes over the next three years, a share below the EU average. Compared to the United States, a smaller proportion of German and EU firms plan to expand capacity, while more than one third of US firms aim to grow operations, a pattern that could widen transatlantic productivity gaps if it persists.

Green transition already underway – and key to energy costs

Most German firms have already taken concrete steps to cut emissions, focusing on energy efficiency, waste reduction and increasing use of renewable energy. Fewer firms than last year see the green transition and stricter climate standards primarily as a risk, suggesting that many now view decarbonisation as a source of competitiveness and a way to reduce exposure to volatile energy prices.

High energy costs nonetheless remain a major concern, with around nine in ten firms affected and many highlighting energy prices as a major obstacle to investment. This underscores the importance of accelerating green investment in energy efficiency, clean energy and grids, where the EIB is already increasing support, including record volumes for energy networks and new initiatives to help smaller businesses lower their energy bills.

Skills, costs and uncertainty still weigh on decisions

Skills shortages are the single most pressing challenge for German firms, with more than nine out of ten companies reporting difficulties in hiring staff with the right skills and nearly three quarters describing this as a major obstacle, far above the EU average. This constraint is particularly acute for the green and digital transitions and limits the ability of firms to scale up innovation and to deploy AI and other advanced technologies across their operations

Alongside skills, high energy costs and uncertainty about the future economic environment are cited as dominant brakes on investment, each affecting around nine in ten firms. German companies report a clear contrast between strengthened confidence in the political and regulatory environment, where they are more upbeat than the EU average, and subdued expectations for the overall economic climate and sector prospects in the year ahead.

Germany, the EU and the United States at a glance

The survey shows that German firms are slightly more likely to invest than the EU average and remain close to the European frontier in areas such as AI adoption and integration into global trade. At the same time, Germany’s investment model is more replacement-focused than the EU overall, with a higher share of spending dedicated to renewing existing capital rather than expanding capacity or developing new products and services.

Compared to the United States, both German and EU firms invest relatively more in replacement and relatively less in growth and innovation, while US firms display a stronger tendency to expand capacity and introduce new products. If these patterns continue, there is a risk that transatlantic productivity and scale advantages will further tilt towards the United States, making it even more important to leverage Europe’s deep single market and public investment tools to support forward-looking private investment.

What the EIB Group is doing: TechEU and beyond

As the EU’s financing arm, the EIB Group is already channelling record levels of finance into innovation, digitalisation and human capital, with nearly EUR 20 billion signed in 2024 for projects that bolster Europe’s technological and industrial base. The new TechEU programme is designed to mobilise around EUR 250 billion in investment in future-proof technologies, including AI, clean tech and skills, helping European innovators and industrial SMEs to scale up within the single market.

The EIB is also backing a second wave of the European Tech Champions Initiative to provide larger growth-stage funding rounds for European scale-ups, building on a first wave that has already supported multiple European unicorns and leading venture funds. On the climate side, a record share of EIB financing now goes to green investment, including energy grids, renewable energy and energy efficiency projects, complemented by advisory support and dedicated programmes targeting SMEs, so that firms can accelerate the green and digital transitions while addressing the skills and cost challenges highlighted in the survey.

The full country report about Germany is available here.

Background information  

EIB  

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. Built around eight core priorities, we finance investments that contribute to EU policy objectives by bolstering climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and bioeconomy, social infrastructure, the capital markets union, and a stronger Europe in a more peaceful and prosperous world. 

The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.