Ernst & Young: Romania is 6th most attractive country for investments in Europe in the next three years

Newsroom 20/06/2012 | 11:41

Romania is the 6th most attractive country for investments in Europe in the next three years, according to 840 executives surveyed by Ernst & Young in the 2012 European Attractiveness report. Business leaders across the world find Romania more attractive than the Czech Republic, Switzerland, Netherlands, Italy, Spain or Sweden.

The Ernst & Young study is based on a methodology which includes two analyses: that of the concrete number of FDI projects implemented in 2011, on one side, and a soft one, looking at perceptions regarding the attractiveness of European countries for FDI, on the other side.

The first analysis of the reality of FDI in Europe is based on Ernst & Young’s European Investment Monitor. This database tracks FDI projects that have resulted in new facilities and/or the creation of new jobs. By excluding portfolio investments, mergers and acquisitions, it shows the reality of investment in manufacturing or services operations by foreign companies across the continent.

The second analysis defines the attractiveness of a location as a combination of image, investors’ confidence and the perception of a country or area’s ability to provide the most competitive benefits for FDI. The field research was conducted by Institute CSA in February and March 2012, via telephone interviews, based on a representative panel of 840 international decision-makers.

“Romania boosts a confident GDP growth, compared to the European average, and a valuable human capital. We are seeing more and more investors attracted by renewables. Further privatizations are lined-up, encouraging investors all over the world to look towards our country. It is crucial that we foster this positive trend through appropriate economic strategies,” says Bogdan Ion (pictured), Country Managing Partner, Ernst & Young Romania.  

Despite the fragility of the Eurozone economy, inward investment continued to rise in Europe in 2011 with the total number of projects significantly higher than pre-crisis levels, according to Ernst & Young’s survey.

Across Europe there was a 2 percent increase in projects from 3,757 in 2010 to 3,906 in 2011.  Even more striking, the average project was markedly larger and foreign direct investment (FDI) job creation was up 15 percent. Although the increase in project numbers was modest, on average they were significantly larger. The US continued to be the largest investor in Europe, providing 1,028 projects, 26 percent of the total. This is a 6 percent increase on the number of projects that the US invested in last year and the highest number in the decade since the survey began.

Investors seem pretty confident in Europe’s capacity to surmount its complex and multiple difficulties. Europe demonstrates a strong, perhaps surprising, level of attraction. Our survey found that investors see Western Europe as second only to China as the most attractive destination for global FDI, with Central and Eastern Europe ranked third. Investors also remain confident about Europe: 81 percent say Europe will overcome its current economic problems.

Attractive sectors in 2011

CEE economies lead in process industries. Romania, Serbia, Slovakia and the Czech Republic attracted 53 percent of new automotive jobs. These countries have attracted big projects because they are cost-competitive and close to Germany, home to many key industrial customers.

Business services and software sectors remain the biggest recipients of FDI projects in Europe with an increase of 19 percent to 666 and 15 percent to 436 respectively. Altogether the two sectors accounted for 28 percent of total projects in 2011, providing more than 16,000 jobs. The automotive sector also saw an increase in the number of FDI projects to 270 from 258 last year and it was also the sector that created the highest number of jobs, at 37,790. The sectors that saw the biggest declines were financial intermediation which fell by 16 percent and electronics by 8 percent.

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