Nearly half of Germany's industrial companies want to expand abroad, according to a survey by consulting group EY published on Friday, in stark contrast with domestic investment, in which less than a sixth of respondents said they had plans.

In a telephone survey of top managers from 115 industrial firms conducted in September, 45% said they were looking abroad, while only 13% wanted to set up new sites in Germany, EY found.

Along those lines, 29% of companies are expected to relocate jobs from Germany abroad, while only 4% plan to bring jobs back.

Nearly two-thirds of managers said they expect jobs in Germany to be lost in the coming years, with only 48% expecting an improvement in the next five years, about the same number as those who see no improvement.

"German industry is sending out alarm signals," said Jan Brorhilker, managing partner of EY's Assurance division in Germany.

"In view of the gloomy economic outlook on the domestic market, many companies are looking abroad in order to benefit from better conditions there," he added.

The German economy was the weakest among its large euro zone peers last year, and a worsening business outlook this year in Europe's largest economy has piled pressure on Chancellor Olaf Scholz's coalition government to focus on industry.

Around 70% of respondents describe bureaucratic requirements as one of the three most important obstacles to economic recovery, while 'wrong political' decisions were described as growth killers by nearly every second industry firm manager.

"Industry is suffocating in a jungle of regulations and reporting requirements," said Brorhilker.

"There is no need for major industrial policy drafts. What is needed is speed, pragmatism and business friendliness," he said.

(Reporting by Rene Wagner; Writing by Miranda Murray; Editing by Emelia Sithole-Matarise)