With the lag in statistics, the latest numbers we have are for 2007 and they showed the best year ever for Europe. Both the number of investment projects and jobs created were at an all-time high. This is likely due to companies acting on plans made before the downturn, and it is 2008 and 2009 where we will see the impact.

Talking to players active in the market it seems that 2008 FDI is still fairly robust, but the reality is more complicated.


There is less money available for some companies to invest in expansion, but others have plenty of capital and are taking full advantage of falling share values to buy up companies, brands and technology at bargain prices.

There is definitely more uncertainty and lack of confidence, which is holding back investment decisions and slowing down the decision-making process. As the downturn reduces consumer spending, certain markets are losing their appeal to investors.

On the upside, major currency fluctuations mean that some European countries are now more cost-effective for manufacturing and we are seeing re-investment in manufacturing capacity.

One section of the marketplace has been very quiet, namely the 1000-plus investment promotion agencies across Europe actively seeking FDI. What are they doing to address the current market conditions? How are they supporting their clients? It would be good to hear from them as we try to gauge the full FDI story for 2008.

Douglas Clark is director of Tenon techlocate, the London-based location consultancy of the Tenon Group, a UK national firm of accountants and business advisers.