FDI in Ireland rose by €71bn in 2020 despite pandemic

17 Dec 2021

Image: © David/Stock.adobe.com

CSO figures found that services was the most attractive sector for FDI inflows, followed by manufacturing.

New figures from the Central Statistics Office (CSO) show that foreign direct investment (FDI) in Ireland increased by €71bn last year, despite the harsh economic impact of the Covid pandemic.

Increased inflow of investment from North America (primarily the US) and offshore centres such as in Bermuda were largely responsible for the rise in FDI in Ireland.

At the same time, Irish stock of direct investment abroad decreased by €14bn to €988bn at the end of 2020. This figure is down from the more than €1trn stock position at the end of 2019.

Investment abroad by enterprises located in Ireland is primarily from the services sector, which was down €78bn in 2020 to €771bn from the €850bn position at the end of 2019. Investment in the EU had the largest share at €427bn (55pc) of total services sector investment.

Meanwhile, investment abroad from the manufacturing sector amounted to €187bn, up €68bn from the 2019 position of €120bn.

Ireland’s services sector also attracted the largest amount of inward investment, pulling in €628bn at the end of 2020 – down €15bn from €643bn in 2019.

Financial intermediation, administrative and support activities saw large increases in investment position, as did the manufacturing sector, which increased by €33bn to a stock position of €469bn in 2020.

The CSO figures confirm IDA Ireland statistics published in January that found FDI in Ireland to remain strong despite the disruption caused by the pandemic, with the technology and life sciences sectors showing particular resilience.

According to IDA, there were 246 new investments in Ireland in 2020, including from 95 new companies, creating a total of 20,123 jobs. However, pandemic-related job losses offset the new jobs, resulting in net creation of 8,944 jobs compared to 14,000 in 2019.

The information and communication services sector continued to employ more than any other sector, and some of last year’s biggest investment announcements were made by AmazonTikTok and Mastercard.

Earlier this year, the CSO had reported that the accumulated value of FDI in Ireland passed the €1trn mark for the first time in 2019, after increasing by more than €100bn over 2018 levels.

The first half of 2021 has continued to see strong FDI flows according to IDA figures, with the creation of 12,500 jobs in the period – a recovery from last year’s decline. However, it cautioned that a return to pre-pandemic levels of FDI was not likely until 2022.

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Vish Gain is a journalist with Silicon Republic