Ireland sees big jump in FDI projects in 2022, remains in Top 10 most attractive European locations for investment

• 21% increase in Foreign Direct Investment in Ireland last year, with 184 new and expansion projects.
• Almost half (48%) of FDI projects located outside of Dublin.
• Software and IT services the biggest sector for FDI in Ireland in 2022, with 31% of total projects.

Dublin, 11 May 2023: Ireland’s exceptionally strong performance in terms of attracting Foreign Direct Investment (FDI) projects has continued, with a 21% increase in the number of FDI projects last year, placing it once again within the top 10 most attractive locations for investments across Europe according to the latest EY European Attractiveness Survey.

Ireland attracted 184 new or expansion projects last year, up from 152 in 2021. Strikingly, almost half of these projects, at 48%, were located outside of Dublin. Across Europe, the biggest sector for FDI projects across Europe was software and IT services, accounting for 20% of total projects in 2022. In Ireland that share was even larger, at 31%, in keeping with the country’s well-established strength in the technology sector.

Feargal de Freine, Assurance Partner at EY Ireland said: “Ireland consistently punches above its weight in attracting FDI. The latest EY European Attractiveness Survey demonstrates the enduring appeal that Ireland’s open access to global markets, highly skilled and educated workforce, attractive lifestyle, and competitive and transparent tax regime holds for foreign direct investment.”

Looking at the broader picture during 2022, businesses around the world announced 5,962 FDI projects in 44 European countries. This represented a year-on-year increase of 1%, compared with an increase of 5% in 2021. Against the backdrop of the wider global geopolitical and economic landscape - including the war in Ukraine, higher energy costs, rising interest rates and supply chain disruptions - this increase, while modest, is a demonstration of Europe’s enduring appeal for FDI.

France remains Europe’s leading destination for FDI, showing growth of 3% last year, with the UK placing second and Germany in third place. While Ireland retained its 10th place position, with a significant increase of 21% in project numbers, several Southern Central and Eastern European states, including Italy, Poland, Portugal, Romania and Turkey, also recorded strong growth in FDI numbers in 2022.

Regional spread of FDI projects across Ireland, Technology and pharma sectors lead the way

One of the most notable features of Ireland’s 2022 performance was the regional spread of the FDI projects, with almost half (48%) located outside of Dublin. The report also highlights Ireland’s agile, pro-business agenda and appeal to global enterprises generally, and large US and UK corporates in particular, which respectively accounted for 59% and 15% of investments during the year.

Following software and IT services, business services and professional services was the second largest sector for projects both for Europe (13%) and Ireland (15%). The number of investments in this sector rose by a very significant 27% in Europe during the year. In another reflection of Ireland’s strong position in particular industries, the third and fourth biggest sectors for FDI last year were medical devices (11%) and pharmaceuticals (10%).

“The survey underlines Ireland’s status as an established location of choice for US and UK multinationals in key sectors such as software, business services, medtech, and pharmaceuticals. That status is built on Ireland’s clear strategy regarding inward investment, the consistently compelling proposition for prospective investors, and sustained excellence in both attracting new investors and facilitating the expansion of existing operations,” explained Feargal de Freine.

Will investment into Ireland increase in 2023?

The outlook remains positive for FDI in Ireland and Europe, amid pent-up demand and supply chain redesign, with digital transformation and the transition to net zero also requiring ambitious investment. 67% of the global investors surveyed for the report indicated “plans to establish or expand operations in Europe over the next year” while in Ireland, 71% of established companies surveyed plan to increase their investment in the country over the next year.

“With more than 500 million consumers and more than 20 million companies, Europe remains a formidable economic force and a magnet for global FDI. It now has an opportunity to capitalise on its strengths while attracting the investment that will fuel the industries of the future,” said Feargal De Freine.

EY Ireland will publish a more detailed analysis of global investor sentiment towards Ireland and Europe in June.

About the survey

The European Attractiveness Survey draws on two sources. The evaluation of FDI in Europe is based on the EY European Investment Monitor (EIM). This EY proprietary database enables the tracking of projects announced in 2022 across 44 countries. Europe’s perceived attractiveness is explored via an online survey of international decision-makers. Field research has been conducted by Euromoney in February and March 2023.

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