The global recession has affected various aspects of many economies worldwide and global FDI has been no exception. In the first six months of 2009, fDi Markets tracked 6644 FDI projects, representing a combined capital investment of $474.6bn and the creation of 1.3 million jobs.
When comparing figures for the first six months of 2009 with the same period of 2008, FDI project numbers have declined by 14%. There was a prominent decline in the resources put into each investment, with the average project in the first half of 2008 consisting of $96m in investment and the creation of 260 jobs, yet in the first six months of 2009 the figures declined to $71m – down 36% – and 194 jobs, also down 36%.
However, companies will still invest in overseas operations, no matter how hard times are, to break into new markets. ‘Domestic market growth potential’ was stated by 32% of companies as their main motive for investing overseas in the first six months of 2009.
By the numbers
The Asia-Pacific region has been the top destination for FDI so far in 2009, attracting 32% of all FDI projects. However, project numbers fell by 21% when compared with the first half of 2008.
The overall capital investment into the Asia-Pacific region fell 42% and the number of jobs created fell 43% when comparing the first half of 2009 with the same period in 2008.
The ‘Rest of Europe’ region suffered in the first half of 2009, with project numbers dropping 37%, capital investment down 41% and total jobs created down 47% in comparison with the same period of 2008.
North America emerged as one of the few regions which performed better in the first half of 2009, attracting 17% more projects, 32% more capital investment and 22% more jobs created than the same period in 2008.
China remains the top destination for FDI projects worldwide for the seventh consecutive year. However, half-year figures for 2009 show that project numbers fell by 37% when compared with the same period in 2008. The UK and the US have attracted more FDI projects compared with 2008, with figures up 47% and 16%, respectively.
Companies from the US are still the most active investors in FDI projects worldwide. With regard to source markets, FDI project numbers by most countries have declined; however, both Spain and the UK have bucked this trend, with Spanish companies setting up 20% more overseas operations and the UK setting up 7% more overseas operations in the first six months of 2009 than in the same period of 2008.
The most popular sector for FDI projects in the first six months of 2009 was business services (where figures grew by 19%) pushing 2008’s top sector, financial services, to third place, with figures falling by 28%. Meanwhile, the number of projects set up in the textiles sector has grown by 43%.
For more information, contact Jacqueline.Hegarty@ft.com for fDi Intelligence’s half-year report.
Dr Henry Loewendahl is product director for fDi Intelligence.