Most attractive FDI locations in Europe: Where does Ireland rank?
Silicon Republic

The EY European Attractiveness Survey puts Ireland in the top five FDI locations, behind Germany, the UK and France.

It has undoubtedly been a turbulent year for businesses across the world. According to figures in the latest Global Investment Trends Monitor from the United Nations Conference on Trade and Development released last month, global foreign direct investment (FDI) saw a dramatic drop in the first half of 2020.

Looking ahead however, a new survey has revealed the top 10 European locations for FDI in 2021, with Ireland reaching fourth place.

The EY European Attractiveness Survey used a two-step methodology to analyse both the reality of FDI, based on the EY European Investment Monitor, and perception of FDI in a particular location, based on information collected from 109 global executives across 14 industries in October 2020.

Survey respondents were asked to select the three European countries they believed will be the most attractive for investment in 2021. Germany, the UK and France took the top three spots, followed by Ireland.

The results will be good news for IDA Ireland, the State body responsible for FDI in Ireland. Speaking at the virtual Future Humanconference last month, IDA Ireland CEO Martin Shanahan that while Covid-19 has undoubtedly had an impact on FDI funding, Ireland has been largely resilient during this difficult period.

“The fundamentals of attracting foreign direct investment haven’t changed, in truth,” he said.

Shifting FDI trends

EY’s survey also revealed a change in FDI trends and investor sentiment since its last survey in April 2020. More than 20pc of investors now feel that Europe will be a more favourable destination for FDI post-Covid. This is compared to just 8pc in April.

While no executives believed there would be an increase in investments before the end of 2020 when surveyed in April of this year, 10pc now anticipate an increase before the end of the year.

In April, only 2pc of executives were not planning any changes to their supply chains. This rose to one-third of executives in October.

EY Ireland partner and head of FDI, Feargal De Freine, said the increased attractiveness of Ireland for FDI is reassuring.

“Ireland’s position as the fourth most attractive European country for investment in 2021, behind the three powerhouse economies of Germany, the UK, and France, positions us well to compete for growing levels of global FDI as we navigate 2021,” he said.

“Having experienced an extensive global slowdown since the pandemic began, companies in Ireland and across Europe now need to accelerate their transformation as they seek to thrive in an emerging post-Covid-19 world order.”

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