European Attractiveness Survey 2010
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Iulie 2010 |
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MARC LHERMITTE - Partner - Ernst & Young International Location Advisory Services
ERNST & YOUNG S.R.L. |
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MARC LHERMITTE
Partner - Ernst & Young International Location Advisory Services
ERNST & YOUNG S.R.L.
The reality of FDI in Europe: aftershocks
In 2009, Europe was hit by the downturn and its aftershocks, receiving a smaller amount of investment and smaller FDI projects in fewer locations. Five years of sustained inward investment growth effectively came to an end. How do perceptions of Europe's attractiveness today stack up against the investment decisions cross-border investors actually made last year? Ernst & Young maintains a unique database that tracks the FDI projects which result in new facilities and the creation of jobs, the European Investment Monitor (EIM). In this section, we describe the changing patterns of FDI in Europe, in sectors and types of investment. We also present, based on Ernst & Young's European Investment Monitor (EIM), the winners and losers in a troubled year.
Global downturn provokes record FDI slowdown
In 2009, Europe secured 3,303 FDI project announcements, 11% fewer than in 2008. Evidence from Ernst & Young's European Investment Monitor (EIM) shows that the nature of investments in Europe is changing too, in tune with underlying trends in Europe's economies.
Ernst & Young's EIM records that Europe suffered a 11% drop in the number of FDI projects. Investors were careful in a year of reduced cash, difficult financing and clear over-capacity in some sectors, such as automotive, electronics and industrial equipment. FDI into Europe generated 16% fewer jobs than in 2008 (124,923), a drop of 24,443 jobs, after a high 215,037 in 2006. Projects of international investors continue to be scaled back, if not postponed or cancelled. This year's European attractiveness survey marks a dramatic turning point. Europe still attracts attention, deals and investments, but these projects clearly have far less employment traction.
However, FDI began to pick up again in the fourth quarter of 2009, signaling a possible recovery of FDI in 2010.
“On average, a new FDI project in Europe creates 69 jobs compared with 101 in 2006.”
