Europe Attractiveness Survey: How Can Europe Act Now to Create Advantage from Adversity (EY)

Summary

• Foreign direct investment (FDI) announcements in Europe fell 5% in 2024 to 5,383 projects, reaching a nine-year low.p.6
• Jobs created by foreign direct investment in Europe decreased by 16% in 2024 compared to 2023.p.6
• France, the UK, and Germany remained the top three destination countries despite project decreases of -14%, -13%, and -17% respectively.p.6
• Only 59% of surveyed businesses plan to establish or expand European operations in the next 12 months, down from 72% in 2024.p.6
• A total of 37% of surveyed investors postponed, canceled, or scaled back their European investment plans in 2024.p.6

Key insights

1. European FDI declined for a second consecutive year in 2024, sitting 16% below pre-pandemic 2019 levels and 19% below the 2017 record high.p.9
2. US investment in Europe fell to its lowest level in a decade, representing just 18% of total European FDI projects.p.9
3. Greenfield manufacturing projects dropped 20% in 2024, causing a 25% drop in newly created manufacturing jobs.p.13
4. Spain achieved a 15% increase in foreign investment projects, supported by €163b from the NextGenerationEU scheme.p.11
5. Electricity prices in Europe remain 2.5 times higher than in the US, while natural gas prices are nearly five times higher.p.20
6. The EU attracted only 5% of global venture capital funding, compared with 52% for the US and 40% for China.p.23
7. Employing staff to manage regulatory compliance costs European businesses 1.8% of revenue, rising to 2.5% for SMEs.p.26
8. A total of 77% of EU businesses cite the lack of skilled staff availability as an obstacle to investment.p.40