The direct foreign investments in Europe

The foreign investments in Spain

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2020: Reduction of volume of the direct foreign investments for 71%

By estimates of UNCTAD, in the European Union the volume of the foreign investments attracted in 2020 dropped by 71%. In Germany rates of falling reached 61%. Among leaders - China and the USA. Read more here.

2013

The number of the projects created at the expense of the direct foreign investments in Europe reached an absolute maximum in 2013, – outputs of the new research EY "Again in a game are like that: Investment attractiveness of the European countries of 2014" (European Attractiveness Survey).

The research includes data analysis about the foreign investments in the European countries for last year and also survey results of 800 heads of the international companies about the markets, most attractive to investments, into the next decade.

2013 turned out record on the volume of the direct foreign investments on the markets of the European countries even despite the fact that the economy of Europe left recession only to the middle of 2013. Thanks to the direct foreign investments last year 3955 projects were financed that is 4% higher than an indicator of 2012 which made 3797 projects. The number of investment projects narynka of Crewe of the pneyshy countries of the continent – Great Britain, Germany and France increased, – at the same time decrease of the activity in the markets of Spain and countries of Eastern Europe was observed.

The most attractive markets for the direct foreign investments

Growth of level of investments by 15% and 799 investment projects last year provided to Great Britain the leading positions in the list of the most attractive markets for the direct foreign investments again. It is followed by Germany where investment volume increased by 12%, and the number of investment projects reached 701. Increase in number of investment projects in France for 9% and also change of dynamics of growth of the direct foreign investments with negative on positive became more unexpected. In spite of the fact that volumes of investment into economy of Spain dropped by 19% after rapid growth in 2012 which was supported thanks to cheap assets, this country remained on the fourth place by the sizes of the attracted direct foreign investments. It is followed by Belgium (the 5th place) and the Netherlands (6th).

In the countries of Central and Eastern Europe, including Russia, the number of the projects financed by the direct foreign investments was reduced almost by 5%, number of the created jobs – for 4%. It is caused, among other things, by reduction of the number of the investment decisions made by the Western European car makers and the centers of joint service.

The analysis by sectors and types of activity

Exit of Europe from recession increased its attractiveness for investments into the innovation industries and the industries making goods with high value added. The software markets and business services remain leading in Europe by the number of investment projects which number made 509 (growth by 27%) and 483 (growth by 31%) respectively. Nearly a half of projects in the sector of the software is founded by the companies with the headquarters in the USA.

Large volumes of the direct foreign investments also came to the pharmaceutical industry (growth by 58%) and the research organizations (growth by 96%), – the number of investment projects in these industries was 141 and 88 respectively. It is no wonder that the analysis of projects by types showed significant growth (23%) in a Research and Development segment. At the same time the quantity of the created jobs increased by 64%. In the sector of industrial production the number of projects increased by 5% at reduction of number of jobs for 12% as investors try to minimize the high level of costs for employees in Europe.

Who invests in the European economy?

The main share of the direct foreign investments in Europe is made by investments in the European market, however, when evaluating over the countries the USA to which share in 2013 1027 projects (26% of total number) fell remain the largest investor. The share of the investment projects from Great Britain financed for the investment account of the USA increased from 26% to 27% of the total number of projects that is almost twice higher, than in Germany which takes the second place in Europe on the volume of the direct foreign investments.

However in general the flow of investments from the USA decreased by 2%. At the same time investments from the BRIC countries significantly increased, having made 28% or 313 projects, at the same time the quantity of the created jobs grew by 37%, having reached 16900. Investments from China grew three times for the last six years, investments from India and Russia also reached record levels in 2013. Similar growth was observed in the field of creation of jobs at the expense of investment projects from the BRIC countries – it was 37%. Germany outstripped Great Britain on the investment attraction from the BRIC countries, having come out on this indicator on top. Growth of this indicator was 50% to values of 2012.

The cities have significant effect on investment attractiveness of the European countries

The big role in improvement or deterioration in perspectives of the countries in the field of attraction of the direct foreign investments was played by the large cities. In London the number of investment projects increased by 21% up to 380. Nearly a half of all projects financed by the direct foreign investments in Great Britain that is the highest rate for the large European countries falls to its share. High growth of number of investment projects is mentioned also in the German cities of Düsseldorf and Darmstadt, made according to 25% and 40%.

The maximum growth of number of investment projects which was nearly 50% is mentioned in Helsinki. Some main European cities (Paris, Barcelona and Dublin) could not attract the considerable amount of new investments that affected investment indicators of their countries.

Long-term trends

The current research includes the analysis of influence of five years' crisis and recession on the market of the direct foreign investments in Europe. Comparison 2009-2013 and allows to define 2004-2008 obvious "winners" and "losers".

The countries of Eastern Europe attracting considerable investment volume in the 2000th years more than others lost in result of financial crisis. The number of investment projects in them was reduced by 12% while in the Western European countries this indicator grew by 19%.

Germany where the number of investment projects increased more than twice, is the obvious leader among the main European markets. In Great Britain the number of projects increased by modest 12% while in France it remained invariable. The group of leaders among the large countries included Spain, the Netherlands, Russia and Ireland. The greatest reduction of the sizes of the direct foreign investments occurred in Eastern Europe: as Romania, Hungary and Bulgaria investment volume fell in such countries twice in 2013.

Investors show бóльшую confidence in the relation of Europe

The end of recession in Europe affected views of the global investors polled in March, 2014 concerning perspectives of the direct foreign investments in this region. In 2013 only 39% of investors considered that the investment attractiveness of Europe in the next three years will increase while 23% believed that it will decrease. Survey results of this year show that 54% expect improvement of investment attractiveness of Europe and only 12% consider that it will worsen. Investors from Asia are most optimistic, 60% from them surely look forward.

Alexander Ivlev, the managing partner of EY company across Russia, says: "According to data retrieveds, in 2013 Russia for the first time has come to the third place on investment attractiveness after the USA and China. Inflow of the direct foreign investments reached 71 billion euros that is 83% higher than an indicator of 2012. Russia bypassed Great Britain, France, Germany, Singapore and Brazil. Also the quantity of the jobs created at the expense of the direct foreign investments increased by 2%. It is very good result, especially against the background of kazatel of 2012 when the volume of PII was reduced by 16.5%".

See Also

• The direct foreign investments in Russia