Global Economy
Greenfield FDI projects in Western Europe fell 15% in 2010; Average project had capex of $35m, created 69 jobs
By Michael Hennigan, Founder and Editor of Finfacts
Apr 19, 2011 - 4:43 AM

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Greenfield FDI (foreign direct investment) projects in Europe fell 15% in 2010 according to fDi Intelligence, a unit of The Financial Times. The average Western European project in 2010 had capital investment of $35m and created 69 jobs. The capex (capital expenditure) in the region was lower than the global average.

In 2010, fDi Intelligence tracked a total of 12,047 FDI projects with associated investment of an estimated $748.8bn, creating an estimated 2,035,593 jobs. The number of FDI projects in 2010 was marginally down by 0.38% on 2009 figures while total capital investment and job creation in 2010 fell by 16% and 4% respectively - - a much smaller decline than the 36% fall in capital investment and 37% fall in job creation in 2009.

In 2010, the average global capital investment per project was $62m with 169 jobs created, compared with the average project size in 2009 of $73.8m and 176 jobs created.

The term 'greenfield' in this context means the expansion of existing facilities or a new direct investment from a first-time investor in a country.

The UK, Germany and France remained the top three destination countries in Western Europe together attracting 55% of all FDI projects in 2010. However, FDI into these three countries fell, with projects into the UK down 11%, Germany down 39% and France down 17%. The UK attracted 748 FDI projects investing an estimated $20bn of capital investment and creating an estimated 49,856 jobs.

fDi Intelligence reports 147 new projects in Ireland in 2010.

Ireland has the benefit of a large stock of existing FDI investment and the principal inward investment agency, IDA Ireland, reported last January that 126 new FDI projects had been won in 2010; 47 companies invested in Ireland for the first time, up 20% on 2009 and 62% of investments were from existing companies.

Excluding IFSC (Dublin's offshore financial centre) related financial transaction investments, the stock of direct investment has been relatively static over the past decade while the full-time jobs level in the tradeable goods and services sectors (foreign-owned and indigenous) was down to 268,000 at the end of last year - - the same level as in 1997 when the workforce was 25% smaller.

Manufacturing was the leading activity for FDI in 2010 with a 20% growth in projects and, along with sales marketing and business services, accounted for two-thirds of global FDI projects for the year.

The fDi Intelligence Global Outlook 2011 says that while Brazil, Australia, Poland, Canada and other countries achieved faster growth in FDI in 2010, the US and China further consolidated their market share dominance. With strong growth in FDI into both US and China, their combined market share of global FDI projects increased from 17.7% in 2009 to 20.3% in 2010. The countries’ combined share of global capital investment remained unchanged at 17.6% in 2010.

The overall ranking of the world’s leading locations for FDI remained unchanged in 2010 in terms of number of greenfield FDI projects attracted, with US at the top followed by China, UK, India and Germany.

The report says the fDi database included a new service in 2010, tracking investor signals, which indicate when a company is considering overseas investment. The report says the signals provide unique insights into the future of FDI.

Investor signals show that the most attractive countries for future investment are broadly consistent with the location of greenfield FDI in 2010. This suggests that companies will map out their global FDI in a similar location pattern to 2010.

Of the most attractive countries for future FDI, India, Mexico, Indonesia and Turkey are the only countries that received a higher share of investor signals than their share of global FDI projects. fDi Intelligence therefore expects FDI into these four countries to increase significantly in the short to medium term.

fDi Intelligence Global Outlook 2011  --  registration and free download

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