With the recession dominating the headlines, it might be thought that a costly and highly technical sector such as aerospace will pull back in terms of investment in 2009.
Yet, the latest figures released by fDi Intelligence show that 45 aerospace projects were tracked in the first quarter of 2009, compared with the 48 recorded in the same period of 2008.
However, the average value per project was lower – $56m in investment and 199 jobs created per project – compared with an average of $89m investment and 315 jobs in the first quarter of 2008.
BY THE NUMBERS
Since 2003, the aerospace sector has experienced an average annual growth in FDI project numbers by 20% year on year, with annual capital investment growing on average by 40% a year, and an average annual rise in job creation figures of 30% .
In terms of activity, the vast majority of aerospace FDI is concentrated in two areas – manufacturing and sales, and marketing and support, which combined account for more than 50% of all FDI since January 2003. The number of FDI projects involved in maintenance and servicing activities has also grown, with 2008 figures up 82% compared with 2007.
European Aeronautic Defence and Space Company (EADS) is the major investor in aerospace FDI according to fDi Intelligence, investing more than double the number of projects when compared with any other company. Since January 2003, EADS has invested $10.55bn in 73 FDI projects, and has created an estimated 23,201 jobs globally in the aerospace sector.
Despite recognising EADS (Netherlands) being the largest investor in terms of project numbers, the US is the top source country for aerospace FDI projects, followed by the UK. This is primarily due to US investors such as Boeing, Textron and General Electric, and UK investors including Easygroup and Virgin, being actively involved in investing in aerospace FDI.
Similar to the top source countries ranking, the top destination country for aerospace FDI is the US, followed by the UK. Despite the US and UK being the top destination countries, the top destination city is Paris, followed by Beijing and Dubai.
Companies investing in the aerospace sector have given many reasons for investing in particular countries, with companies citing ‘proximity to markets or customers’ and ‘domestic market growth potential’ as their primary determinants.
The vast majority of FDI projects set up in the aerospace sector are new presences. However, there has been a notable increase in the number of FDI expansions, with only nine in 2003 compared to 37 in 2008.