EY’s Europe Attractiveness Survey 2019 finds foreign direct investment into Europe declined in 2018 – but a strengthened skills base and infrastructure, especially in digital, will keep it ahead of the game.
Although Europe fares well compared with other regions, appetite to invest there has dropped to a seven-year low. A cocktail of economic and political uncertainty, not just in Europe but around the world, has caused businesses to throttle back on foreign investment.
However, our 2019 survey of over 500 international businesses reveals that, compared to other regions, Western Europe is now considered more attractive than at any point in the last ten years as a place to establish operations. What’s more, Eastern Europe is now considered the second most attractive region for investment. Five years ago, it ranked only fourth.
In 2018, however, for the first time in the last six years, foreign direct investment (FDI) into Europe declined. Businesses around the world completed 6,356 FDI projects in Europe, a 4% decrease.
Surveyed businesses say Brexit is the number one risk to Europe’s attractiveness, with political instability in the EU second, the rise in populist and protectionist feelings third and global political uncertainty fourth.
Our findings explore the drivers behind countries winning and losing foreign investment, where FDI has increased or declined, how countries can boost it, and the sectors reshaping the FDI landscape. Across our findings, the rise of the digital economy is evident.
Read the report here.
Andy Baldwin, EY Global Managing Partner – Client Service
Hanne Jesca Bax, EY EMEIA Markets & Accounts Leader
Marc Lhermitte, EY EMEIA Geostrategic Business Group Lead