Europe Still #1 for Business Investment

Western Europe still the most attractive economic zone for 63% of investors; Central and Eastern Europe increasingly viewed as a “low cost” competitor for China, says Ernst & Young survey.

The recent E&Y press release says this...

"The survey found that Europe is still on a par with its competitors as a viable zone for investment and is standing up to the dual challenge of the United States and China in attracting foreign investors.

Despite a slight reduction in the popularity of Western Europe as an investment destination among executives surveyed, it scored 63% on the global scale of attractiveness, (down 5% on last year) and remains ahead of Central and Eastern Europe, with 55%.

As the new star of foreign investment, China’s impressive growth and the potential of China’s domestic market is attracting a number of investors. China is now the leading country and the third-placed global zone for foreign investment. In twelve months, China’s attractiveness has increased to 52% from 37%, allowing it to leapfrog the USA and Canada (45%).

Other key findings:

31% of international investment is directed towards Central and Eastern Europe, more than France, Germany, Spain and Belgium combined.

Within Europe, Poland and Hungary are challenging the traditional supremacy of Germany, the UK and France, particularly due to their competitiveness in terms of labour costs.

In terms of job creation by new establishments, 6 countries in Central and Eastern Europe figure in the European top 10, headed by the UK, Poland and France.

The most dynamic sectors in Europe in 2004 were automotive, with 11.6% of international investment in Europe and hi-tech, with 10.9%.

Central and Eastern Europe represent a viable alternative to China for the automotive, consumer goods and heavy industry sectors.

Decision makers overwhelmingly view the service and software sectors as the future drivers of the Western European economy.

Business leaders remain sceptical regarding an improvement in the attractiveness of Europe over the next 3 years (37% against 45% in 2004). "