FDI 2013: The number greenfield investment
projects in Europe fell in the year and Ireland remained in the top 10.
The term 'greenfield' covers new projects in a
country and new investments such as an extension to a factory or
significant new investment such as at Intel Ireland.
fDi Intelligence, a unit of the Financial Times,
tracks foreign direct investment projects that are announced and doesn't include
mergers and acquisitions or other equity-based or nonequity investments.
For example, the American Chamber of Commerce in
Ireland issued a report that claimed: "In the past half decade, US firms have
invested more capital in Ireland than in the previous half century."
Despite a claim of new investment of
$129.5bn in the period 2008-2012, only 3,300 permanent net jobs were added by US
firms in Ireland - -
so there is a lot of opportunity for fairytales.
reported last year that at a conference in Dublin the head of Ireland's
largest bank gave small business leaders the "15-second elevator pitch" he gives
to US executives when he is in New York or Boston.
"I've mentioned to US investors that US companies have
more capital invested in Ireland than they do in Brazil, Russia, India and China
put together," said Richie Boucher, chief
executive of Bank of Ireland.
Richie Boucher should get his facts from
here shows that jobs in FDI exporting firms in Ireland in 2013 were below
the level in 2000 -- 13 years ago -- despite a 22% rise in the overall size of
fDi Report 2014' [pdf; available free after registration] shows that inward
investment projects to Ireland in 2013 were valued at $4.2bn and updating
project count data from 2012, the total number of projects was at 157.
The report says that the interesting story may be
that while FDI in most emerging economies fell slightly in 2013, the greater
part of the increase in foreign direct investment in the same year originated
from the medium and small sized emerging and frontier markets.
fDi says that FDI into Europe declined in 2013, falling 12.08% to $137.26bn on
the back of a 6% decline in project numbers to 4,166.
The UK remains the leading destination for FDI in Europe, with 796 projects
recorded at a total value of $26.51bn, accounting for almost 20% of
FDI in the region. Turkey continues to increase its market share, accounting for
6.69% of total FDI in Europe with $9.19bn-worth of projects announced in 2013.
This increase has pushed Turkey up the European rankings table to fourth from
seventh in 2012.
Western Europe was the top source (outward) region
for FDI in 2013. It accounted for 34.94% of all announced outward FDI
in the year and also experienced a 10.38% increase on 2012. However, fDi says
the number of FDI projects from the region decreased in 2013, by 3.48% to
5,269. Total estimated FDI from western Europe, excluding intra-western Europe
FDI, increased 13% on 2012 to $176.4bn.
In terms of European FDI projects, none of the top 10 countries
recorded a growth in project numbers in 2013, with the exception of Ireland
(0.68%). Germany climbed three places to fifth position in regards to the number
of jobs created in Europe with FDI in the country creating 23,836 jobs in 2013,
an increase of 33.62%.
The headline global finding of the report is that greenfield FDI
started to recover in 2013 with a 10.94% growth in FDI from $557.58bn in 2012 to
$618.62bn. The growth in greenfield capital investment by foreign investors in
2013 exactly matches the growth in official FDI flows, with the UN Council on
Trade and Development (Unctad) recording 11% growth in FDI flows in 2013 with
$1460bn of FDI.
While the report says data on greenfield FDI and general FDI
flows (which include M&A and other types of investment) are methodologically
quite different, the 11% growth recorded in both measures of FDI indicates a
high level of confidence that growth has resumed in both longterm capital flows
and productive investment by foreign investors.
The growth in FDI in 2013 was, however, unevenly distributed across regions
of the world. Latin America and the Caribbean was the best performing region
when it comes to growth in FDI, with a doubling in 2013 to $139.81bn. More than
half of the absolute increase in FDI in Latin America and the Caribbean was
accounted for by a $40bn infrastructure project announced in Nicaragua by a Hong
Kong-led consortium. The Middle East recorded the second largest increase in FDI
in 2013 with $46.8bn of greenfield FDI, 43.68% higher than in 2012. Africa also
recorded growth in FDI of 10.76%, reaching $51.98bn in 2013. North America
recorded a slight decline in FDI in 2013 (a 1.36% fall) while FDI in
Asia-Pacific fell by 4.67% and in Europe declined by 12.08%. Overall,
Asia-Pacific and Latin America and the Caribbean attracted the highest volume of
FDI in 2013.