IRELAND is no longer a preferred location for foreign investment.
This is according to a KPMG survey on global corporate capital flows which found Ireland is not cited in any of the areas highlighted by corporations looking to invest abroad.
It said that had the research been carried out five or 10 years ago, Ireland might have expected to feature as a preferred place to invest for many respondents looking for a business- friendly, low-tax environment. However, it said today corporations are looking elsewhere, and Ireland is not cited in any of the areas covered by the study.
It also said Irish finance directors believe the current credit crisis will affect investment for the next two or three years, but will recover in the longer term.
The majority of Irish foreign investment will be focused on the US and British markets in the coming years, according to the report which surveyed 311 people responsible for investment strategy in large global corporations.
KPMG partner Donall Gannon said it may be a mixture of scale, distance and business culture, but with a few exceptions, Irish investment is lagging behind the current international trends of investing into the BRIC (Brazil, Russia, India, and China) countries.
“It appears timely for Irish businesses to review their future investment strategies and consider these countries as a viable and attractive market,” Mr Gannon said.
Irish investors expecting to make an investment in Britain over the next five years fell 5% to 55%, while predictions for investment into the US remains the same going forward at 35%.
“Based on this survey Irish investment over the next few years will continue to be predominately into the UK and US markets.
“Irish investors have a high level of knowledge of these two markets and this is a considerable advantage in making a cross-border investment.
“With the improvements in the German and Polish economies in recent years, these are becoming more attractive to Irish investors,” said Mr Gannon.
Looking ahead Poland will account for 15% of investments followed by Germany with 10%.
From a global perspective, China is expected to overtake the US as the world’s top recipient of corporate investment in the next five years, and should become the most influential country in IT and telecoms, industrial products and mining.
India is likely to see the largest growth in its share of foreign investment overall, and should become the world leader for investment in manufacturing.
But the European economies are expected to keep their attraction for investors, with Britain maintaining a very strong position, especially in financial services.
The results showed a move away from investments in the US, Japan, Singapore and the UAE, and a big increase in flows to Brazil, Russia, China and India.
© Irish Examiner Ltd. All rights reserved