France tops EY list of European nations by ability to draw FDI, UK 2nd

The United Kingdom remained second and was the only country in the top three to see project numbers increase year on year (YoY), while Germany followed in the third place, according to the EY 2024 UK Attractiveness Survey.

The United Kingdom was home to 985 FDI projects last year—a 6 per cent YoY increase.

Europe as a whole recorded a 4-per cent YoY decline, with 5,694 projects recorded in 2023. This was the continent’s lowest FDI total since 2020 and was 11 per cent lower than its pre-pandemic level (6,412) and 14 per cent lower than 2017 (6,653). 2017 represented Europe’s highest peak for projects in the last decade.

France was Europe’s largest recipient of inward investment, recording 1,194 FDI projects in 2023. However, this represented a 5 per cent decrease on its 2022 project total. Germany recorded 733 projects last year—a decline of 12 per cent YoY.

The United Kingdom’s share of all European FDI projects grew to 17.3 per cent last year—an increase on the 15.6 per cent seen in 2022. However, its broader FDI trend mirrors Europe’s by recording a lower level of projects in the last four years in comparison to pre-pandemic levels.

UK project numbers have remained below 1,000 since 2019 and there were 220 fewer projects recorded in 2023 than at the UK’s high point of the decade in 2017, when 1,205 projects were recorded, EY said in a release.

Despite a 19 per cent decline in technology project numbers across Europe, digital technology remains the leading sector for UK FDI and played a significant role in the country’s YoY FDI growth.

The United Kingdom continues to perform in terms of job creation. For projects where expected job totals were reported, the UK continues to lead Europe on overall jobs created (52,200), its second-highest total in the last decade and ahead of Spain (42,400) and France (39,700).

The country recorded an average 60.9 jobs per FDI project, which was higher than in 2022 (58.9) and represented the UK’s second highest jobs-per-project ratio in the last decade. For the fourth consecutive year, it outperformed France (35) and Germany (49) on jobs per project.

The United States remained Europe and the United Kingdom’s leading source of FDI projects last year, with the US a more significant investor for the UK than it is for the rest of the continent. Twenty-two per cent of all UK FDI projects originated in the United States compared to 19 per cent of European projects.

Germany was Europe’s second largest origin of investment projects as a whole in 2023. However, this was not the case for the UK specifically. India remained the United Kingdom’s second largest origin country for FDI for a second consecutive year, contributing 7.7 per cent of UK projects, with Germany in third (7.1 per cent).

India was the 18th largest contributor for European FDI projects as a whole in 2023, with the UK securing 55.1 per cent of all Indian projects into Europe.

Meanwhile, Australia was only the 27th largest origin of investment projects into Europe in 2023 but was the fifth largest origin of projects into the UK. More than half (56.5 per cent) of Australian investment into Europe last year was in in the UK.

Fibre2Fashion News Desk (DS)