Ireland ranked second for FDI

IRELAND is ranked as the second most attractive country globally for foreign direct investment (FDI).

The number of projects coming to Ireland jumped by 15% last year, with a corresponding increase in the rate of job creation, according to the National Irish Bank/FDI monitor.

National Irish Bank chief economist Ronnie O’Toole said 2011 has also started well for FDI into Ireland.

“We continue to see a steady flow of mid-sized projects, particularly in services industries such as software and customer support, though also with some high-quality manufacturing projects.”

Ireland retained second place globally for attractiveness to FDI when adjusted for economy size. Singapore remains the most favoured destination, with Thailand following in third place.

Mr O’Toole said 15% of projects here involved establishing headquarters, second only to the Netherlands.

“Ireland was also very successful in attracting R&D projects, coming in fifth in the 100 countries ranked, behind Finland, Taiwan, Israel and Puerto Rico.”

The report said there are a number of reasons Ireland remains attractive to foreign multinationals, despite the economic crisis. It said it offers access to a highly skilled workforce and a low corporation tax rate, while cost competitiveness has improved as many non-pay costs have fallen since 2008.

It pointed out Ireland has built a critical mass of firms in a number of important industries such as pharmaceuticals, internet services and financial services.

The number of internationally mobile investment projects this year should increase, according to the UN trade and investment body, UNCTAD. It forecasts that FDI flows will rise to between $1.3 trillion (€942 billion) and $1.5tn in 2011, up from $1.1tn in 2010.

The prospects for the global economy in 2011 are positive, Mr O’Toole said.

“Asian growth is strong and activity indicators in the US and Europe have turned higher. While the euro debt crisis remains unresolved, the immediate sense of crisis has passed, with countries like Germany returning to strong economic growth.

“If Ireland can continue to win a disproportionate share of this FDI pie, then further growth in inward jobs should be seen this year.”

The index measures the total amount of investment received for each country last year.