The EY European Attractiveness Survey found that Ireland attracted 206 foreign direct investments in 2018, up by 135 on the previous year. And while Europe attracted 6,356 foreign investments, that was a 4 per cent dip on the previous year.
The overall decline in FDI was primarily felt in the UK and Germany, which together account for around one-third of the investment into Europe. A 35 per cent fall in manufacturing FDI in the UK was mainly responsible for the negative performance while in Germany, foreign investment in the production and automotive sector fell 7 per cent.
Italy recorded the highest FDI growth in Europe’s top 20 countries with a 63 per cent rise while Spain and Belgium had positive performances. The biggest losers were the Czech Republic, the Netherlands and Sweden.
Competition for talent
Commenting on the findings, EY partner Michael Hall said: “With more businesses arriving on our shores, the competition for talent is greater than ever and will continue to have an impact on wages which are already growing at a pace. Whilst competition is a highly desirable economic trend that drives innovation and future growth, firms must be ready for the challenge that this brings.”
Top investments secured last year came from Jaguar Land Rover, which announced a new software engineering centre in Shannon, AbbVie, which said it was expanding its manufacturing facility in Sligo with a €139 million investment, MSD, which plans to add more than 520 jobs across two plants, and Deutsche Börse Group, which is planning to add 200 jobs in Cork.
Brexit was classified as the biggest risk to Europe’s attractiveness, the survey found. Additionally, the survey suggested that investment decisions are beginning to slow down, with 27 per cent of businesses planning to establish or expand European operations this year, down from 35 per cent last year.
EY’s survey is based on a database which tracks FDI projects that have resulted in the creation of new facilities and new jobs. The survey was conducted among 506 international executives, 40 per cent of whom were located in western Europe.