Global foreign direct investment (FDI) recovered strongly in March, as companies announced expansion plans amidst industrial transformation and stronger growth forecasts in advanced economies. 

The fDi Index, which tracks foreign investors’ sentiment, stood at 855 points in March — its highest level for more than a year and an increase of 43.6% from the record low of March 2020, when investors put decisions on hold following the Covid-19-related uncertainty and restrictions, according to figures from greenfield investment monitor fDi Markets.  


The number of greenfield FDI projects announced worldwide by foreign investors rose to 1064 in March 2021, the highest level since February 2020, as the IMF expects a stronger recovery in advanced economies than first expected.  

The spike in cross-border announcements is a sign investors are beginning to open fire in a new capital expenditure cycle expected through 2021. Professional services firms were particularly active in March, with the tech and business services sectors posting the highest FDI project increase from the same month of 2020. 

Notably, Vienna-based retail investing broker Bitpanda plans to set up tech hubs in several European cities, after raising $170m of funding and becoming Austria’s first tech ‘unicorn’. Elsewhere, US-based software group CAE, which enables the trade of semiconductor equipment and commodities, announced it would triple its Asian footprint over the next three years.

Ryan Jacob, the chief executive of CAE, said in a statement that “Asia is the most important market for the semiconductor industry”, adding that the region has grown into a set of ecosystems with “advanced manufacturing, unique chip design, and broad test and assembly innovation”. Ongoing supply shortages in the global semiconductor industry is leading to an expected surge of investment across the industry.

Manufacturing is back

Manufacturers announced investment worth more than $21.5bn in March, up by 88% from a year earlier. This was helped by capital-intensive projects relating to new technological developments in sectors such as automotive, consumer electronics and life sciences.

US-based Bravo Motor Company is set to invest $4.36bn to establish a new electric vehicles and battery pack manufacturing facility in the Brazilian city of Belo Horizonte, with the project expected to create more than 13,800 direct and indirect jobs. 

Meanwhile, in Poland, South Korea’s SK Group announced it would pour almost $1bn into two new plants for the production of separators for lithium-ion batteries.

Several big pharmaceutical companies also announced plans to ramp up their vaccine production and research and development efforts. These include UK-based GSK’s $398m expansion of its existing facility in Wavre, Belgium, and France-based Sanofi’s plans to build a new vaccine facility in Toronto, Canada. 

North America leads

The largest rise of FDI projects in March, compared with a year earlier, was seen in North America, with the US and Canada ranking highest globally, followed by Spain, China, Colombia and Saudi Arabia. 

US investors, traditionally the largest source of capital, continued to look for opportunities at home. In March, they announced 325 inter-state projects (domestic projects announced by companies headquartered in a different state to the final investment destination), against the 135 announced abroad. This is the highest ratio of domestic-to-foreign projects made by US investors since the fDi Index began in October 2015.

Elsewhere, fDi Markets tracked less capital investment across both the Asia-Pacific and Africa regions as a whole, compared with a year earlier, with a few notable exceptions. In Mongolia, GCL-Poly Energy announced it would invest $2.78bn into a polysilicon factory as part of a joint venture, while UAE-based Metito will invest $739m into an agricultural wastewater plant in El Hamam, Egypt.

There are signs of more investment on the horizon too. Some 366 signals — an early indication that a company will be considering a future investment project and a major component of the fDi Index — were tracked in March, up from 283 a month earlier. This marks the highest number of signals since July 2020.