| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Global Economy Last Updated: Jun 26, 2014 - 3:30 PM

FDI: Ireland not among prospective host sites of top global companies
By Michael Hennigan, Finfacts founder and editor
Jun 25, 2014 - 7:31 AM

Email this article
 Printer friendly page

Foreign direct investment (FDI) into developing economies is forecast to peak while China is expected to become a net investor, according to an annual report from an UN agency that was published on Tuesday. In a related survey, Ireland is not among preferred future host sites of top global companies.

The UN Conference on Trade and Development (Unctad) in its annual World Investment Report says FDI grew 9%  in 2013 to $1.45tn and is forecast to rise 12.5% this year to $1.6tn.

Despite an overall increase in inflows to $566bn in developed economies , the recovery was concentrated in a smaller set of economies with 24 of 39 economies registering a fall in inflows. Overall outflows were weighed down by a contraction of outflows from North America, despite the continued expansion of investment from Japan and a recovery in Europe. In terms of global share, developed countries accounted for 39% of total inflows and 61% of total outflows – both at a historically low level.

Flows into the developing world were at a record $778bn, accounting for 54% of global FDI last year with China and the rest of developing Asia attracting $426bn in FDI in 2013 while the EU and North America both drew about $250bn in FDI.

Unctad said one reason for the subdued level of FDI flows was that an anticipated upturn in M&A activity failed to materialise until the first quarter of 2014. A downturn in the mining industry also played a role. As in 2012, intra-company loans proved to be particularly volatile and their patterns varied across countries. The report also notes that, as the weight of developing economies in the global economy increases, transnational corporations (TNCs) are readjusting their focus to respond to the growing potential of emerging markets.

By region, inflows to Europe were $251bn (up 3% over 2012), of which the EU countries accounted for $246bn. Among the major economies, inflows to Germany – which had recorded an exceptionally low volume in 2012 – rebounded sharply, but France and the United Kingdom saw a steep decline. In all cases, large swings in intra-company loans were a significant contributing factor. Inflows to Italy and Spain rebounded sharply with the latter becoming the largest European recipient country in 2013.

Ireland had inflows of $38bn and outflows of $23bn in 2013 compared with $38bn and $18bn in 2012 -- however the key metrics are projects and employment as retained earnings, which could be cash holdings related to tax avoidance, are treated as inflows. See chart here on FDI employment in Ireland 2000-2013.

There will likely be a headline that in 2013 the UK inflow was less than the Irish level but again, it would be an empty boast.

Responses to this year’s World Investment Prospects Survey (WIPS) support an optimistic scenario. This year’s survey generated responses from 164 TNCs and China remains the post popular destination for big companies - - see chart above.

In an EY report on Europe published last month [pdf; see page 12], of a panel of 808 international executives, 76% chose Germany (40%), UK, France and the Netherlands as the most attractive destinations.

Outflows from Europe increased by 10% to $328bn, of which $250bn were from the EU countries. The report shows that Switzerland became the Europe’s largest direct investor country. However, set against the drastic decline in 2012, the recovery of European FDI was modest. Both inflows and outflows remained about half of the level in 2011 and about a quarter of the peak in 2007.

Despite weak flows of FDI from Europe, inflows to North America recovered to $250bn, rendering both economies the largest recipients among developed countries in 2013. The recovery was primarily due to large inflows from Japan to the United States. In contrast, outflows from North America shed another 10% to $381bn. One reason for this decline was that United States TNCs were transferring funds from Europe back to the United States.

The United States was not the only recipient country that saw a large increase in Japanese FDI, which grew for the fourth successive year, rising to $136bn. Market-seeking FDI in South-East Asia also helped Japan consolidate its position as the second largest direct investor country (figure 2). Inflows to Australia and New Zealand together declined by 12% to $51bn.

Although the share of transatlantic FDI flows has declined in recent years, the EU and the United States are important partners for each other in terms of FDI. As such, a successful conclusion to the Transatlantic Trade and Investment Partnership (TTIP) negotiations could have significant impacts on FDI flows.

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Global Economy
Latest Headlines
Strong Swiss franc gloom deepens for exporters
Global investors shift focus to China; EM outflows surge to $1tn in 13 months
Global oil glut will continue into 2016
Stable growth momentum in OECD area but slowing expected in China
Prices for major food commodities in July lowest since September 2009
Global manufacturing in July weakest level in two years
US, China and UK lead top 25 target countries for foreign direct investment
Budget surpluses rare in developed countries from 1980s; Italy, France, Greece had none in 60 and 40 years
Singapore, London and Shanghai top cities for new FDI projects in 2014; Dublin in 11th place
Exchange rates shuffle as Dublin ranked 49th most expensive city; Paris at 46; Berlin at 105
Western consumer groups under pressure in China and India
Developing countries facing “structural slowdown” likely to last for years
OECD BEPS Tax Project: Amazon books UK sales in UK; Australia proposes up to 100% in penalties
Emerging Markets Index falls to 12-month low in May as manufacturing contracts
US and world economies slowing in 2015 — OECD
Global manufacturing production rose slightly in May; Trade flows weak
GDP growth in OECD area slowed to 0.3% in the first quarter of 2015
Only one quarter of workers worldwide have stable employment contracts
Automatic Exchange of Tax Information: OECD says countries won't be able to game system
Gates Foundation loses in Swiss family's shares coup
Minimum wage levels in OECD countries
Brent oil benchmark over $68 a barrel - up almost 50% in 2015
Global growth slows and manufacturing dips to 21-month low
Family-controlled firms dominate European business
Top 10 of world’s 250 largest consumer products companies account for 30% of sales
Nine of world's 20 fastest growing economies in Africa
Globalisation maybe stalling as trade growth remains weak
Global growth prospects uneven across major economies says IMF
Emerging markets growth lowest since 2009; Global growth at 30-year average
China's economic rebalancing hitting Latin American economies
New York, London, HK & Singapore top global financial centres index; Dublin recovers
Global growth in modest expansion from low oil prices/ monetary easing says OECD
Composite leading indicators point to positive change in growth momentum in the Eurozone
Global labour market trends portend paradise for some but uncertainty for many workers
Vienna remains top of World Quality of Living Rankings in 2015; Dublin at 34
Zurich and Geneva overtake Singapore to become world's most expensive cities
HSBC Switzerland and Falciani: How it happened
Global economic power to continue shift from advanced economies
Global food price index falls in January; Cereal output set for record
Global debt has risen $57tn or 17% of world GDP since 2007