Poland in the first "5" of the most attractive investment destinations in Europe
Poland in the first "5" of the most attractive investment destinations in Europe
2016 proved to be a good time for Europe in terms of the number of Foreign Direct Investment (FDI), which induce creation of new jobs and fixed capital expenditures. Growth leaders include Sweden, Italy and the Czech Republic. These countries reported increased number of new projects by 76%, 62% and 57% respectively. On the other hand, only in 3 European “Top 20 countries” – the Netherlands, Belgium and Switzerland – there was less foreign investment than in the previous year. Despite good results, the geopolitical and macroeconomic challenges faced by the continent with over 500 million consumers and 30 million businesses are reflected in investors’ attitude, especially in the short term. This is demonstrated by the fact that only 28% of EY surveyed investors plan to expand their presence in Europe next year (as compared to 32% a year before). In the opinion of foreign investors, the expected date of the return of sustainable economic growth in Europe has slightly postponed. The number of respondents expecting the improvement in less than 5 years decreased from 53% in 2015 to 42%, while the number of those surveyed who expect the improvement in the longer term increased accordingly.
Polish investment in Europe
The EY report confirms Poland's strong position on the investment map of Europe. In 2016, 256 new FDI projects were announced in our country, which constitutes an increase by 21% from 211 projects a year before. These investments created at least 22,074 jobs - an increase by 12% from 19,651 reported in 2015. In both categories we have proved to be the undisputed leader of Central and Eastern Europe. Warsaw has also grown as one of the most attractive cities in the continent. 8% of respondents surveyed by EY named the capital of Poland among the three most attractive locations, which means a year-on-year increase by 4%.
New jobs - visible effect of FDI
Europe and especially its central and eastern part has experienced a strong increase in the number of new jobs created in connection with the announced FDI. Our part of the continent is responsible for more than half (52%) of all new jobs related to investment projects in 2016. The leaders are Ukraine (up 435%) and Moldova (up 220%). However, when it comes to absolute figures – the UK is the leader. Despite the imminent vision of Brexit, 43,165 new jobs will be created through investments. It is worth mentioning, however, that this record is only by 2% better than a year ago - it is by far the slowest growth rate among the top 10 European countries. Poland, which has 22,074 new jobs thanks to new FDI, took second place in whole Europe and first place in CEE. Other countries where over 15,000 new jobs were declared include also Germany, Romania, France, Serbia and Russia.
Paweł Tynel, Partner of EY and leader of EY Innovation Management Group
A quarter-million of new jobs created by new foreign investment in 2016 alone is the result which should be congratulated on. Especially since it was a period, in which due to geopolitics investment downtime and economic stagnation were expected. Investors’ response with regard to this situation was the record activity and increased engagement in the continent. This is a clear message to European political decision makers - business players believe that our continent has returned to the path of growth and that the European economy works well. It is worth emphasizing that in 2012-2016, FDI in Europe generated, according to our estimates, over one million new jobs. This is a confirmation of investors’ confidence as regards the Old Continent, despite numerous internal troubles.
USA – the largest foreign investor in Europe
Every fifth new project in Europe was generated in 2016 by investors from the United States of America or Canada. It was the North American companies that turned out to be the biggest foreign investors (from outside of Europe) on our continent – 1,310 projects (22% of the total) in the past year. However, the biggest investor in Europe were European companies - as many as 3,272 new projects (56% of the total) recorded in 2016 were linked to intra-community direct investment, thus creating 138,431 new jobs. Looking at individual European countries, when it comes to generating FDI in other countries, the leaders included Germany (651 projects outside their own country), France (346), Great Britain (335), Switzerland (289) and Italy (187). China, which increased its business involvement by a quarter, turned out to be the third largest foreign investor in Europe last year. Chinese companies have announced 297 projects on our continent, which have generated 7,919 jobs. It is worth noting that two thirds of the Chinese companies' projects involved investment in sales and marketing companies. Investors from China have also been active in the manufacturing sector.
Services and production as the strong points of Europe
Last year, business and software development accounted for a quarter of all new FDI projects in Europe. The strength of the European digital transformation is evidenced by the fact that the software development sector turned out to be the largest source of foreign-funded projects in Europe in 2016, generating 780 projects. However, it was the business services sector which recorded the biggest year-on-year increase - by as much as 47%. 27,513 new jobs have been created, when looking at investment in business services in Europe. However, most new jobs are associated with investments in the automotive sector – as much as 60,249 (up 64%). The strength of our continent is still production. There were 1,538 FDI projects in this sector (29% of the total). CEE still remains its most important production centre. It was here where 755 projects in this industry were created. This accounts for almost half (49%) of all production projects in the Old Continent.
Investors believe in Europe
The vast majority (80%) of investors already present in Europe, while asked about the likely impact of Brexit on their businesses, claim that the exit of Great Britain from the European Union does not motivate them to make business relocation plans. Statistics confirm these declarations - among 2016 FDI, new projects accounted for 68%, expanding existing investments for 30%, and changed location for only 2%. At the same time, foreign entrepreneurs emphasize concerns about possible tax, administrative and regulatory consequences. Despite the uncertainty over the geopolitical climate, 65% of respondents are optimistic about the future of the European Union. They affirm that the freedom of movement of goods, capital, services, and labour between the 28 EU Member States continues to provide an attractive environment for business development and investment.
"European Investment Attractiveness 2017" - EY Report
The EY "European Attractiveness Survey" (Investors vote "remain" in Europe) consists of two parts: data collected by the EY Global Investment Monitor on foreign investments in Europe in 2016 (excluding portfolio investment and mergers and acquisitions) and foreign investors’ perceptions of individual countries and cities. The accuracy of the data is confirmed via direct telephone interviews with investors. The study identified 5,845 new foreign direct investments in Europe in 2016. The survey was conducted in March 2017. 505 business decision makers, responsible for investments responded to the EY questions about the attractiveness of Europe.
Report is available here
About EY
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