Romania ranks 13th among the top 20 FDI destination countries in Europe, the same as in 2017.
Europe’s two largest economies, UK and Germany, which together account for around one-third of the FDI in Europe, attracted 13% less investment than in the previous year (1,054 and 973 FDI projects respectively).
The negative performance of the UK was due to a 35% decrease in manufacturing FDI projects (to 140), driven by investments into capacity to service the single market moving away from the UK. In addition, the number of newly established headquarters, which create high-value and highly-paid jobs, halved from 98 in 2017 to 48 last year, the survey showed.
Germany’s traditionally strong areas were also impacted: it saw a 7% production decrease in the automotive sector, mainly due to heightened concerns around a hard Brexit, US tariffs and a slowdown in demand from China.
France, which recorded spectacular FDI growth of 31% in 2017, only grew by 1% in 2018. However, for the first time, more research and development (R&D) and manufacturing FDI projects (144 and 339 respectively) were established in France last year than in any other European country.
A number of countries recorded high double-digit declines in FDI growth: the Netherlands (-32%) which, however, still retains its place in the top 10 investment destinations; Sweden (-32%); and the Czech Republic (-51%), the EY survey showed.
The study shows lower investor optimism with only 37% of surveyed businesses foreseeing an improvement in Europe’s attractiveness in the next three years, significantly less than the 50% that did so last year. The decrease is primarily caused by decelerating manufacturing and supply chain FDI plans, with only 10% of surveyed businesses planning to invest in manufacturing, supply chain and logistics projects this year, compared with 16% last year.