Industrial investment is shifting east as defence manufacturers, EV producers, semiconductor firms and energy developers expand across Central and Eastern Europe (CEE). Rising labour costs in Western Europe and geopolitical pressure on supply chains are accelerating the trend. CEE is becoming a strategic hub for Europe’s next industrial cycle.
Industrial investment is moving east
Industrial investment across Europe is increasingly moving east. Companies are expanding in CEE to secure lower costs and strategic locations. Defence, EVs, chips and energy projects now anchor the region’s growth. This shift reflects deeper geopolitical and economic pressures.
Defence industry expansion
Defence spending is rising sharply across the region. In the Czech Republic, Colt CZ Group is preparing an Amsterdam listing. The company is benefiting from higher NATO procurement.
Poland is now the EU’s largest defence investor. Its defence budget exceeds 4% of GDP, the highest in NATO. State group PGZ is expanding production to meet demand.
Defence is becoming a core industrial engine for CEE.
EV and automotive manufacturing
CEE is also emerging as a major EV hub. Romania’s Allview launched a new urban EV this year. The model targets low‑cost city mobility.
Hungary is attracting large Chinese EV investment. BYD is building its first European car factory in the country. The plant will anchor a wider EV supply chain.
Slovakia is strengthening its EV position. Volvo is constructing a major EV plant in the country. The project supports Slovakia’s automotive transition.
CEE is becoming a competitive EV and battery corridor.
Semiconductors and tech manufacturing
Semiconductor investment is rising across the region. Poland secured a major Intel chip‑packaging facility. The project strengthens Europe’s semiconductor resilience.
Tech investment is also accelerating. CEE start‑ups are attracting more VC funding. Companies like UiPath and Bolt show the region’s potential.
The region is becoming a credible tech manufacturing base.
Energy transition and nuclear investment
Energy infrastructure is another major driver. Poland is advancing its nuclear programme with Westinghouse. The project aims to strengthen long‑term energy security.
Romania is moving ahead with SMR nuclear plans. NuScale is supporting the country’s small‑reactor deployment. The project could become a regional model.
CEE is positioning itself as a key energy‑transition hub.
Implications for Europe
Europe’s industrial geography is shifting. CEE offers lower costs, strong engineering talent and strategic locations. Western Europe faces higher labour costs and slower permitting. Investors are responding by moving capital east.
This shift will reshape Europe’s manufacturing base. CEE will gain influence in defence, EVs, chips and energy. Western Europe must adapt to remain competitive.
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