A report released Wednesday by the German Economic Institute (IW), showed that as foreign companies avoided making investments in Germany last year, billions flowed out of the nation.

IW calculations showed that there was roughly €125 billion ($132 billion) more investment flowing out of Germany than there was investment flowing into the EU’s largest economy from abroad in 2022. According to the report, it represented “the highest net outflows ever recorded in Germany.”

Almost 70% of the money German companies invested flowed to ventures in other European states, according to the report.

The institute warned, “The numbers are alarming: in the worst case, this is the beginning of de-industrialization.”

The IW report noted the trend began before the onset of the Covid-19 pandemic, and the conditions worsened once the EU began to suffer from the energy crisis that resulted once Russian energy began to be withdrawn from the European markets following the invasion of Ukraine causing energy prices to soar.

In addition the report notes that German companies are suffering from a shortage of skilled workers, which is reducing their ability to grow. On top of that, investment programs in other nations, such as the subsidies of the United State’s Inflation Reduction Act have, “made investments outside of Germany more attractive.”

IW economist Christian Rusche said, “Investment conditions in Germany have recently deteriorated once again due to high energy prices and the increasing shortage of skilled workers,” noting that high corporate taxes, rampant bureaucracy, and ailing infrastructure were all also factors.

“For Germany to once again become the top address for foreign investment in the future, the German government urgently needs to take countermeasures.”