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, Study results: EY analysis: Sharp decline in foreign investment in Europe | news, Forex-News, Forex-News
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Study results: EY analysis: Sharp decline in foreign investment in Europe | news

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, Study results: EY analysis: Sharp decline in foreign investment in Europe | news, Forex-News, Forex-News

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, Study results: EY analysis: Sharp decline in foreign investment in Europe | news, Forex-News, Forex-News
• The number of foreign investment projects in Europe decreased in 2020

• Germany can hold many investors

• Chinese companies are the second most important investors in Germany

Slight decreases compared to the previous year

Despite the corona crisis and multiple lockdowns, Germany was able to assert itself as an investment location last year and retain many foreign investors or win new ones. This is shown by the results of a current analysis by the British consulting service provider Ernst & Young, or EY for short. Accordingly, the number of 930 investment projects announced by foreign companies in Germany only fell by four percent compared to the previous year. Other European countries, on the other hand, posted significantly greater declines, as the study shows. In France, for example, the number of foreign investments fell by 18 percent to 985, while in Great Britain, with 975 announced investment projects, the number fell by twelve percent compared to the previous year. However, this means that the number of projects is still significantly higher than in Germany, which gives the two countries the top two places in the European location ranking.

Fewer foreign investment projects announced

With a total of 5,578 investment projects by foreign investors, 13 percent fewer projects were planned across Europe than in the previous year. According to the latest analysis by the British consulting service provider Ernst & Young, the number has declined, particularly against the background of the considerable restrictions on public and economic life. It is noted, however, that the experts initially assumed an even greater decline in investment activity. Some countries such as Poland, Turkey, Austria and Switzerland even managed to win more investment projects from foreign companies than in the previous year. German companies made a total of 603 investments in other European countries and, with a decline of eleven percent, are clearly less willing to invest than in the previous year. Nevertheless, German companies occupy second place in the investor ranking behind US companies and well ahead of British companies.

A sign of great confidence

The overall evaluation of the study shows that, despite negative expectations, the decline in the number of announced investment projects remained within a manageable range. Not only Germany, but also many other European countries were able to convince and win over many foreign investors despite times of crisis. Henrik Ahlers, Chairman of the Management Board of EY Germany, sees the results of the study largely as a sign of great confidence in the competitiveness of the economies in Europe: “The Corona crisis led to a kind of paralysis throughout Europe in the spring, to massive austerity measures and led to a temporary halt in many investment projects. But in the second half of the year the economy picked up again in many places and the investment environment improved considerably. The bottom line was that the decline was considerably less than initially feared. ”

These countries invested the most money in Europe

Although EY found a decline of 18 percent in its study, the United States remained by far the largest investor in Europe with 1,213 projects even during the pandemic. This means that the USA has twice as many investors in first place as German companies in second place. “Even German corporations – traditionally the second largest group of investors in Europe – were more cautious than in 2019 and reduced their commitment by eleven percent,” according to the EY study. According to this, there were 603 projects, 72 fewer than in the previous year. “The most important investment goals of German companies in Europe were: France (159 projects, plus eleven percent), Great Britain (64 projects, minus 15 percent) and Spain (60 projects; minus ten percent),” the report says. While the USA and Germany continued to be willing to invest, the United Kingdom, on the other hand, severely throttled its commitment in Europe in 2020. According to EY, the slight increase of three percent from the previous year ended up falling by 24 percent. The number of investments fell from 493 to 375. According to the report, French investors reduced their involvement in Europe by 15 percent and invested in only 307 projects. While China had increased investments by 23 percent in 2019, the interest of Chinese donors in companies in Europe fell sharply during the corona pandemic. The analysts reported 261 projects, a drop of 16 percent.

For the study, investment projects were recorded that lead to the creation of new locations and new jobs, while portfolio and M&A investments were not taken into account.

Finanzen.net editorial team

Image Sources: Jirsak / Shutterstock, SFIO CRACHO / Shutterstock.com

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, Study results: EY analysis: Sharp decline in foreign investment in Europe | news, Forex-News, Forex-News

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