EY just released the 2018 European Attractiveness Report – the 17th edition as part of the EY Attractiveness Program.
This latest report explores foreign direct investment (FDI) in Europe and reveals an inflexion in the pace and shape of growth. The evaluation of FDI in Europe is based on an IBM analysis, as well as a survey of 500 international decision makers.
This report is published at a critical time for the future of Europe, and provides important assessments and insights from across Europe. As part of the Attractiveness Program, there will also be country reports developed, which will present a deep dive into the country findings.
- Slower, but resilient growth: in 2017, 6,653 FDI projects were established in Europe, which will create 353,425 jobs, almost half the scorching growth of 19% in 2016
- Investment intentions remain strong: globally, Western Europe is still ranked the most attractive region by 53% of investors surveyed, with Central and Eastern Europe coming third, just behind China
- Optimism about the future of the European Union: although investors are concerned about economic and political instability within the EU, they were increasingly optimistic – evidenced by 41% of companies present in Europe having planned further expansion
- Powerful undercurrents of change emerge: geopolitical risk is the top concern of 42% of investors already established in Europe, and 26% who have yet to invest there. Second is the slow-down of the historic growth of investment to the UK due to Brexit, with 30% of international investors present in greater Europe, and 50% of investors in the UK, citing Brexit as having an impact on their business
- Superpower rivalry, trade tensions and BEPS tax reform: the policy fallout from globalization, the financial crisis and technology disruption, are creating choppy waters for investors. Trade tensions threaten international supply chains and location decisions, and international collaboration to stem tax avoidance coincides with the emergence of new taxes – all of which are requiring investors to rethink investment planning
- Impact of digitalization: 34% of investors believe that Europe’s economic future will overwhelmingly be shaped by the tidal wave of digitalization, with more than a quarter of international investors highlighting the need for Europe to cultivate its digital economy.
Compliments of EY, a member of the EACCNY