Europe displays a mixed performance in FDI

The number of FDI projects in Europe declined by 3% in 2011, with a mixed performance across countries, according to a report released by fDi Intelligence.

The UK experienced solid growth in FDI, reinforcing its position as the leading FDI location in Europe.
However, in terms of total job creation, FDI in Russia generated the highest number of new jobs, with 89,047 jobs created in 2011 compared to 66,817 in the UK. This was despite a decline in FDI in Russia in 2011.

A selection of small and medium-sized economies in Europe performed strongly. The Netherlands, Ireland, Serbia and Romania all achieved a significant growth in inward FDI. While the Netherlands was the best performer, with a 29% growth of FDI projects in 2011, estimated job creation from FDI in the Dutch economy actually fell by 13% as the average project size declined. Ireland performed well, with job creation growing by 13% and capital investment by 78%. Positioned outside the top 10, Belgium was among the countries that experienced a contrast, with a 43% decline in the number of recorded FDI projects in 2011.

FDI projects out of Europe

The UK retained its position as the leading European investor measured by the number of FDI projects established overseas in 2011, closely followed by Germany.

FDI from Spain created 19% fewer jobs and 28% lower capital investment than in 2010. By comparison Ireland and Denmark saw growth in the number of outward FDI projects by 20% and 21%, respectively.

Capital investment made by Danish companies overseas increased from an estimated $3.4bn in 2010 to nearly $8bn in 2011. Major Danish investors included Grundfos, a manufacturer of pipes and pumps, investing in a €50m manufacturing facility in Serbia, and Lego announcing plans to boost capacity at its Nyiregyhaza plant in Hungary with an investment of $94m.

Capital investment in renewable energy almost doubled in 2011

The largest sector for inbound FDI in Europe was renewable energy, reaching an estimated $40bn and accounting for one-third of estimated capital investment in the continent. In contrast, capital investment in the coal, oil and natural gas sector fell by 36%, with estimated investment of $13bn. The transport equipment sector also saw a large decline in FDI in 2011, with a 25% drop in capital investment.

In terms of job creation, the real estate, hotel and tourism sector remained the leading sector for job creation, despite continued decline in FDI in the sector. 

Global FDI predictions for 2012

Global FDI predictions for 2012

The FDI Forecasting Unit at fDi Intelligence is predicting a 4.4% growth in global FDI in 2012 as its positive scenario. This assumes no major economic and political crises (e.g. a Greek default), that Europe does not fall into recession, and that China’s economic growth does not slow down below 7.5%. 

 -ends-

Notes to editors

For further information please contact Dino Ribeiro, dino.ribeiro@ft.com or +44 (0)20 7873 3964.

Download the full fDi Report 2012 at http://www.fdiintelligence.com/fDiReport

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Referencing – please state the source as fDi Intelligence from The Financial Times Ltd.

About the fDi Report 2012

The fDi Report 2012 is published by fDi Intelligence, part of The Financial Times Limited.  It draws on data from the fDi Markets database which tracks greenfield investment projects. It does not include Mergers & Acquisitions (M&A) or other equity-based or non-equity investments. Only new investment projects and significant expansions of existing projects are included. fDi Markets is the most authoritative source of intelligence on real investment in the global economy and the only source of greenfield investment data that covers all countries and industries worldwide. Retail projects have been excluded from this analysis but are tracked by fDi Markets.

The data presented includes FDI projects that have either been announced or opened by a company. The data on capital investment and job creation is based on the total investment the company is making at the time of the project announcement or opening. As companies can raise capital locally, phase their investment over a period of time, and can channel their investment through different countries for tax efficiency the data used in this report is different to the official data on FDI flows. The data from fDi Markets is more accurate and a real time indicator of the real investment companies are making in their overseas subsidiaries.

The data shown includes estimates for capital investment and job creation derived from algorithms (patent pending) when a company does not release the information. The World Bank, UNCTAD, Economist Intelligence Unit and over 100 governments around the world as well as major corporations use our data as the primarily source of intelligence on greenfield investment trends. 

About fDi Intelligence

• fDi Intelligence, a division of The Financial Times Ltd, is the largest FDI centre of excellence globally. Specialising in all areas relating to foreign direct investment and investment promotion, the full suite of services includes: location advertising to generate brand awareness; industry-leading intelligence tools to develop FDI strategies and identify potential investors; and tailored FDI events and investor roundtables to meet target companies and generate business leads.

• Products within the portfolio include fDi Markets, a database tracking crossborder greenfield investment on a real-time basis; fDi Benchmark, a database which benchmarks global locations on their attractiveness to foreign investors; and fDi Magazine and its website fDiIntelligence.com.

About The Financial Times

The Financial Times, one of the world’s leading business news organisations, is recognised internationally for its authority, integrity and accuracy. Providing essential news, comment, data and analysis for the global business community, the FT has a combined paid print and digital circulation of 604,856 (Deloitte assured, 3 October 2011 to 1 January 2012) and a combined print and online average daily readership of 2.2 million people worldwide (PwC assured, November 2011). FT.com has more than 4.5 million registered users and 285,475 paying digital subscribers. The newspaper, printed at 22 print sites across the globe, has a global print circulation of 316,493 (ABC, March 2012).