Nearly half of foreign investors are postponing their projects in France, while emphasizing the country's strengths. Legislative and economic uncertainty weighs heavily on strategic decisions, according to a study published by EY.
Declining attractiveness but projects maintained
France, long considered the most attractive European country for foreign investments, is experiencing a halt in its dynamics. A survey carried out by EY among 200 foreign decision-makers in 25 countries reveals that 49% of them have reduced or postponed their investment projects since the dissolution of the National Assembly last June. However, no companies canceled their plans, demonstrating notable resilience.
Investors mainly point to legislative and regulatory uncertainty, cited by 59% of respondents, as one of the major obstacles to their decisions. The slowdown in reforms (47%) and the questioning of certain public policies in strategic sectors (40%) also fuel their concerns. These concerns, combined with heated budgetary debates and new tax proposals, are weakening the image of economic stability that France cultivated.
Despite this uncertain context, France retains several major assets. The wealth of skills, cited by 37% of decision-makers surveyed, as well as its capacity for innovation (29%) and the reliability of its infrastructure (25%), continue to attract investors. The latter are still considering projects in research and development or services, with 60% of respondents planning initiatives by 2027. However, only 49% plan to expand industrial capacities in France, and barely 15% plan to install decision-making centers there.
Growth sectors and clear expectations
Investors are waiting for clear signals from the government, particularly in terms of ecological transition. While 47% of respondents have no plans related to decarbonization, recent announcements from the Barnier government, providing for an increase in aid to the tune of 1.6 billion euros, could reverse this trend.
For Marc Lhermitte, partner at EY, “ despite the impact of the economic and political situation, international leaders still count on France “. The expert also underlines that the appointment of Michel Barnier to the post of Prime Minister has reassured some economic players.
The report highlights an opportunity for France to regain ground. Investors are hoping for optimization of public spending and concrete measures to support industry and innovation. According to Jean-Roch Varon, president of EY France, “ supporting SMEs and ETIs in their transformations is essential, as is strengthening the country's energy advantage ».
