2013 European attractiveness survey

Looking at Europe's investors

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Who are the clients of Europe? Which sectors do they invest in? What are their projects for the future?

US companies remain the biggest source of FDI in Europe, providing 27.5% of inward investment projects in 2012. And European companies contributed more than half of all European FDI inflows: 7 European countries, led by Germany and the UK, were among the region’s top 10 investors.

Together, FDI projects from European countries and the US accounted for more than 80% of FDI flows into the region. The share of FDI projects from Brazil, India and China remained very low, at just 5.6%.

FDI in Europe by region of origin
(by number of projects)

EY - FDI in Europe by region of origin *BIC: Brazil, India and China.
Source: EY’s European Investment Monitor, 2013.

Industry focus: the European mix

Manufacturing is still strong in Europe. By activity, manufacturing accounted for 25.6% of investment projects, but 59.6% of jobs created on the continent. Though the number of FDI projects fell 6.4%, manufacturing created 4.4% more jobs, and the average number of jobs per manufacturing project rose from 94 in 2011 to 104 in 2012. Investors remain confident about Europe’s attractiveness as a manufacturing location: 84% expect to still be manufacturing in Europe in 10 years’ time.

Business services and software remained the leading FDI sectors in Europe, accounting for 29% of announcements in 2012. The UK was again the leading destination for these projects (27.5%), with Germany a distant second, followed by France and Spain.

Meanwhile, EU car sales were at their lowest for almost two decades in 2012.

Restructuring Europe: a call for reindustrialization

Amid the ongoing Eurozone crisis and with more attractive growth prospects in other parts of the world, European companies are wrestling with increasing financial and operational challenges. Revenues and profit margins are under pressure, and business is now more vulnerable to external risks. European governments have been primarily focused on austerity, and many companies have turned to cost cutting.

Plans to establish operations over next year

EY - Plans to establish operations over next year Source: EY’s European attractiveness survey 2012 (total respondents: 220),
EY’s European attractiveness survey 2013 (total respondents: 309).