Ireland significantly outperformed the rest of Europe in attracting foreign direct investment last year.
According to the 2012 Foreign Direct Investment Report from Foreign Direct Intelligence — a London-based subsidiary of the Financial Times Group — Ireland attracted 186 investment projects from overseas during 2011, up 22% on 2010 levels.
While the number of investments ranked Ireland seventh for foreign direct investment in Europe last year, in percentage growth terms the country was second only to the Netherlands.
Furthermore, Irish performance far outweighed the average for Europe. The continent on a whole saw a 3% decline in foreign direct investment activity for the year.
A selection of small and medium-sized economies in Europe performed strongly. Ireland, the Netherlands, Serbia, and Romania all achieved a significant growth in inward foreign direct investment.
The report states: “While the Netherlands was the best performer, with a 29% growth of foreign direct investment projects in 2011, estimated job creation from foreign direct investment there actually fell by 13%, as the average project size declined.
“In contrast, job creation in Ireland grew by 13% and capital investment by 78%,” the report said.
Ireland also ranked highly — up 21% — in terms of growth in outward investment by domestic-based companies.
In this regard, Canada and Australia were the biggest climbers last year, with Canadian companies investing nearly 60% more in 2011 than in the preceding year, and Australian investment overseas rising by 20%.
On a global scale, foreign direct investment activity rose by nearly 6% last year — almost double the percentage growth evident in 2010 — with Africa and Latin America growth hotspots .
The agency is predicting 4.4% growth in global foreign direct investment activity this year, as a positive scenario. However, this growth, it stressed, will be reliant on the absence of any major economic and political crises, on the eurozone not falling into recession and on China’s economic growth not slowing below the 7.5% mark.
“If any of these events take place, then our revised forecast for 2012 is a 1%-2% growth in foreign direct investment. If multiple events take place, then the foreign direct investment market is likely to decline in 2012,” a spokesperson said.
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