For the fifth consecutive year, France retains its title of European champion of foreign investments in the ranking established by the E&Y firm for 2023. Good news to put into perspective: in France as throughout Europe, foreign investments have generally declined.
The number of new projectsForeign investments is down 4% on the European continent. Investors have especially turned away from the Europe of 27.
In Germany, where the economy is slipping, the fall is brutal: -12%, as in Italy, -6% for Spain, -5% for France. According to UNCTAD, Asia takes the lead, followed by the United States. The world’s leading economic power benefited from the effect Inflation Reduction Act. The public support for the industry put in place by Joe Biden attracts foreign companies and partially keeps American companies at home. The United States remains the leading investing country in Europe, but with a number of projects down 15% compared to 2022.
Read alsoForeign investments in France driven by the automobile industry in 2023
A new signal of Europe’s downgrading?
In these uncertain geopolitical and economic times, Europe, in poor shape, with anemic growth, suddenly appears very vulnerable. The stacking of different decision levels scares away investors, according to Marc Lhermitte, associate member of E&Y. “ The managers interviewed tell ushe continues, yes, Europe has diversity, but also dispersion”. Slowness and procrastination in energy or trade policy worry them and end up pushing them towards other, more understandable areas.
The surprise rebound of the United Kingdom
On the edge of the Europe of 27, there are also countries which, on the contrary, attract investors. This is particularly the case in the United Kingdom. +6% foreign investment. This is the real surprise of the 2023 vintage of this attractiveness barometer. Tech and finance are the two sectors driving the renewed interest in this post-Brexit kingdom. A healthy rebound, but still insufficient to repair the damage to the industry that has been going on for five years, according to Marc Lhermitte. Turkey also recorded a staggering increase in foreign investment projects: +17%. This excellent performance confirms the attraction that this country has had for several years already. Thanks to its national and regional market, and abundant and inexpensive labor.
The relocation of industry to the periphery
Note that other countries on the periphery of the Union benefit greatly from the relocation of industry. +70% industrial investments for Hungary or the Czech Republic, +30% for Serbia. Poland, but also Italy and Spain, and even Turkey, are also experiencing a proliferation of factory creations with foreign capital. Also due to their very competitive labor costs. Spain, for example, is half as expensive as France. In 2023, Paris nevertheless remains the leading destination for industrial investments with the megaprojects announced in electric batteries. The overall balances are unchanged. The three countries at the top of the European ranking, France, the United Kingdom, and Germany, still receive half of the foreign investment projects on the entire continent.
Read alsoFrance: relocation of companies to boost industrial investments
