Press release

29 May 2020 Dublin, IE

Ireland Remains in Top 10 Most Attractive European Locations for Foreign Direct Investment out of 47 countries

Ireland achieves eighth position in the Top 10 Most Attractive European Locations for FDI in 2019 out of 47 countries, improving its position from tenth in 2018

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EY Ireland

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EY Ireland, a leading global professional services organisation providing assurance, tax, audit, strategy and transactions and consulting services.

  • Ireland continues to hold first position for the greatest number of projects per million population
  • At least 80% of Irish projects expected to be realised despite COVID-19 interruption
  • 6,412 FDI projects announced in Europe in last year, a modest 0.9% uptick on 2018
  • EY says Ireland’s COVID-19 recovery plan should be built around Digital and building resilience

Dublin, 27 May 2020: Ireland attracted 191 foreign direct investment (FDI) projects in 2019, increasing its rank in the European league table of most attractive destinations to eighth from tenth, according to the EY European Attractiveness Survey, which was published today. Following exceptionally strong levels of investment in 2018, when there were 205 FDI projects, the number of projects in 2019 declined by 7%, but Ireland continues to hold first position for the greatest number of projects per million population.

The EY report examines the performance and perceptions of Europe as a destination for FDI, and this year includes a survey of 800 international investors looking at the impact of COVID-19 on investment.

Overall, Europe attracted 6,412 FDI projects in 2019, a modest 0.9% uptick on 2018 and the second-strongest year for FDI in Europe ever, behind 2017.

Impact of COVID-19

While COVID-19 is expected to interrupt some project realisation, EY analysis shows that 80% of FDI projects in Ireland are likely be maintained, due to our highly competitive, service-orientated FDI investments.

By contrast, the corresponding figures for Europe more broadly revealed a more cautious approach from investors, where it is expected that market uncertainty will result in only 65% of projects announced in 2019 being delivered on time, while a further 25% of projects are expected to be delayed and 10% to be cancelled.

Commenting on the findings, Feargal De Freine, Partner and Head of FDI, EY Ireland said:

“The impressive performance of investments in digital tech and business services are noteworthy features of Ireland’s performance in 2019. While a reduction in the total number of projects may attract attention, it’s important to note that Ireland’s strategy has been to focus on the value and quality of the FDI it attracts rather than the volume. The new projects secured reflect an extension of the investor and project base, with 61% representing new projects, rather than solely building on past successes.

Furthermore, Ireland’s performance in 2019 continues to reflect a marked improvement of over 40% when compared with 2017, pointing to the sustainability of the country’s attractiveness.

Notwithstanding the current challenges, we believe we have an opportunity to build on Ireland’s proven strengths to secure our long-term attractiveness to investors. For example, 82% of those surveyed expect technology adoption to accelerate in the next three years with Ireland well positioned to compete for investment in digitization.”

FDI Dominant in Business Services and Digital Sectors in Ireland

The Business Services, Digital and Finance sectors attracted most FDI in Ireland in 2019, collectively accounting for 69% of new projects.

The report highlights that in order to ensure continued attractiveness, Ireland and indeed Europe, must protect international and European trade. EY’s analysis shows that investment projects from European companies into other European countries represented more than half (52%) of FDI in the past three years. The US continues to be the most active investor country in Ireland, accounting for 61% of 2019 projects.

The ongoing transformation of FDI is expected to continue given the views of survey respondents. 39% of respondents ranked CleanTech first in terms of its potential to drive economic growth across Europe in the coming years. The digital economy sector ranks second (35%), and the health care and well-being sector third (24%).

Feargal commented:In a post-COVID world business resilience will be hugely important. . . Ireland must be agile and do all it can to ensure that we are prepared for future shocks, whether that is  another pandemic, a mass cyber event or an environmental catastrophe.

This pandemic has highlighted the economic vulnerability of certain segments of society and demonstrated that the vulnerability of some increases the vulnerability of all. Businesses and governments should do all they can to protect not only the most vulnerable sectors but also the most at-risk people, including part-time, independent and gig workers.”

European Table

France became Europe’s top destination for FDI in 2019, attracting 1,197 new projects, a 17% annual increase. Despite Brexit uncertainty, FDI in the UK climbed 5% (1,109 projects in 2019), placing it second in the rankings, losing its top rank for the first time. Investment in Germany was in third place (971 projects). Spain took fourth place attracting 486 new projects representing a 55% increase.

Among the other top ten European FDI destinations, countries recorded mixed performance including Belgium (-4%), Netherlands (11%), Poland (-26%), Russia (-9%) and Turkey (-33%). Beyond the top ten, Slovakia scored the highest growth in the top 20 with 65 new projects, representing a 110% increase.

Feargal concluded: “Investment was particularly strong in France and Spain, but global trade tensions, Brexit uncertainty – including  fears of a no deal Brexit – and subdued economic growth caused investment across all of Europe to increase by only a modest amount. Ireland’s position as a world-leading FDI location will be challenged more than ever in the years ahead but this survey is a reminder of its formidable track record and ongoing attractiveness.”

ENDS

Notes to editors

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About EY Attractiveness Survey

EY attractiveness surveys analyses the attractiveness of a particular region or country as an investment destination. The surveys are designed to help businesses make investment decisions and governments remove barriers to growth. A two-step methodology analyses both the reality and perception of FDI in the country or region.

The evaluation of the reality of FDI in Europe is based on the EY European Investment Monitor (EIM), the proprietary EY database, produced in collaboration with OCO. The field research was conducted by the CSA Institute in January and February 2020, based on a representative panel of 504 international decision-makers. Data collected around the impact of COVID-19 on FDI in Europe was conducted by Euromoney in April 2020, based on a representative panel of 113 international decision makers and a series of webinars with 30 European investment promotion agencies (IPA’s). ey.com/attractiveness