5,578 new direct investment projects were launched in Europe last year, which is 13% less than in 2019, when 6,412 new investment projects were launched in the region, according to the latest EY (formerly Ernst & Young) European investment attractiveness study EY Attractiveness Survey Europe, which analyzes investment data and gathers investor opinions.
“In the context of the pandemic, this can be seen as a very good investment attraction performance, considering that in many Western European countries last year the decline in GDP was in the range of 7-11%. Last year’s number of new projects was the lowest in five years, but still higher than in any year between 2005 and 2015. In fact, Europe’s position in attracting investment is particularly strong in times of crisis, as it is in times of international turmoil that investors are especially looking for a politically stable, large and prosperous market with an educated and skilled workforce and developed infrastructure, ”says Guntars Krols, EY Partner, Strategy and Business Head of Consulting Department in the Baltic States.
Last year, the largest number of new investment projects was attracted by France (985, 18% less than in 2019), followed by Great Britain (975, 12% less than in 2019) and Germany (930, 4% less than in 2019). Spain (354, 27% less than in 2019) and Belgium (227, 15% less than in 2019). Poland, which ranks sixth, recorded a 10% increase in new investment projects last year to 219.
Among the 20 leading investment countries, the largest decline last year was in Hungary (-54%), Serbia (-32%), Spain (-27%), Romania (-27%) and Russia (-26%).
EY’s survey reveals that, despite the pandemic crisis, investors generally believe that Europe’s attractiveness for foreign direct investment will improve over the next three years, with 62% of respondents agreeing with it, while 31% believe it will remain at current levels and only 5% think so. that it will get worse.
According to the study, investors will see European growth in investment in the coming years determined by the digital economy sectors (IT, telecommunications, media) – this is the opinion of 51% of surveyed investors. Another 36% of investors believe that investment growth will be driven by the green energy sectors, while another 27% believe that growth is expected in healthcare, and 21% believe that growth will be driven by the car and mobility sectors.
When assessing countries for launching investment projects, the main priority for investors is the stability of the political and regulatory environment in the country, which is considered important by 53% of investors, followed by the stability and availability of infrastructure – transport, telecommunications and energy. Also, 44% of investors indicate that the availability of skills and labor in the country is important.
Investors cite growing protectionist sentiment among politicians and citizens as the main risks to the attractiveness of European investment over the next three years, with 41% of respondents citing the development of European digital services legislation and trade and tariff policy uncertainty. 29% also mention the evolution of European environmental policy as a risk of investment attractiveness. In turn, 27% of investors are concerned about the high volatility of currency and commodity prices in the international market.
Data on the performance of the Baltics, including Latvia, in attracting new investments will be published on June 10.
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