US tops Kearney 2024 FDI confidence index, Canada ranks 2nd, China 3rd

Canada maintained its second rank, forming part of the top five markets for the 12th consecutive year.

China jumped from seventh position to third and Japan dropped from third to seventh.

Overall, this year’s survey revealed investors’ preference for developed markets, which accounted for 17 of the 25 markets on the index, the Chicago-headquartered global management consulting firm said.

However, emerging markets continue to build their presence in the list, with the United Arab Emirates and Saudi Arabia in particular experiencing meteoric rises from eighteenth to eighth and from twenty-fourth to fourteenth respectively.

The strength of the US economy—the fastest growing in the G7—and rebounding consumer sentiment likely supported this score.

China’s rise in the list could be explained in part by its loosening of capital controls for foreign investors in Shanghai and Beijing in September 2023, while Japan’s drop likely reflects the continuing economic woes of the market, which entered a recession in the fourth quarter (Q4) last year, Erik R Peterson, partner and managing director of Kearney’s Global Business Policy Council, and Terry Toland, consultant, thought leadership at the council, wrote on the company’s website.

The second annual ranking for emerging markets welcomes newcomers to the top 25

China, the United Arab Emirates, Saudi Arabia, India, Brazil, Mexico, Poland, and Argentina make up the top eight positions after the first two, and they are the only emerging markets included in the world rankings.

Regionally, the Americas has the most markets on the list with nine, followed by Asia Pacific at seven, the Middle East and Africa at five, and Europe at four.

Southeast Asia continues to show its strength, with Thailand, Malaysia, Indonesia and the Philippines all among the top 15.

Seven of the 25 markets on the index—Poland, Chile, Romania, Peru, Hungary, Uruguay, and Oman—joined the list for the first time.

A striking 88 per cent said they were planning to raise their FDI in the next three years—6 per cent more than last year. Furthermore, 89 per cent—up from 86 per cent in 2023—said they regarded FDI as more important to their corporate profitability and competitiveness in the next three years.

And the level of net optimism on the global economy grew only marginally to 64 per cent, net pessimism decreased notably from 35 to 29 per cent compared with last year.

Eighty-five per cent of investors think an increase in geopolitical tensions will affect investment decisions this year, and firms are making decisions to nearshore and friendshore as a reaction to these pressures.

Investors also anticipate that a more restrictive business regulatory environment in both developed and emerging markets is likely to pose risks in the year ahead.

Seventy-two per cent of investors said they are making significant or moderate use of artificial intelligence (AI) in their business operations. They anticipate their businesses will use AI for customer service and chatbots, automation of manual processes, and supply chain enhancement.

Further, 63 per cent of investors said their organisation will make significant or moderate increases in AI usage to guide their investment decisions. Investors cite cost or efficiency savings and decision-making accuracy as the top benefits they gain when using AI in their decision-making.

Fibre2Fashion News Desk (DS)