Dublin is the fourth most attractive European city for FDI, says EY report

31 May 2022

Image: © Alexey Zarodov/Stock.adobe.com

Ireland’s positive reputation is reflected in future investment intentions, with almost half of survey respondents planning to grow in Ireland in the next year.

According to the latest European Attractiveness survey from EY, Ireland has maintained its status as one of the top 10 European locations for foreign direct investment (FDI).

Ireland is a popular location for corporate headquarters and global business services, and has a market share of 3pc of all FDI among European countries.

Dublin is now the fourth most attractive European city for investors, with 17pc of respondents surveyed by EY picking the Irish capital as the top city for FDI over the next three years.

The US accounted for 59pc of Ireland’s FDI projects during 2021, while the UK accounted for 19pc.

However, the number of FDI projects in Ireland fell by 8pc last year due to an overall drop in US investment projects across Europe, as well as a reduction in software and IT services investments during the same period.

Feargal de Freine, assurance partner and head of FDI at EY Ireland, said there was “a strong performance” recorded in Ireland despite global disruptions.

“In terms of industry, Ireland’s FDI projects are dominated by the services sector with software and IT leading the way, followed by business and professional services, and finance,” he added.

“After a sharp decline in 2020, Ireland’s projects in business and professional services grew by 13pc, outperforming Europe where sector projects fell by 16pc in 2021. Importantly, the high-value life sciences sector (pharmaceuticals and medical devices) also saw in increase in projects in 2021.”

Ireland’s positive reputation is reflected in future investment intentions. Almost half (43pc) of the survey respondents said they were planning to establish or expand operations in Ireland in the next year.

Ireland’s reputation is also enhanced by its positive performance in terms of sustainability. The majority (88pc) of those surveyed said Ireland performs as well as, or better than, the European average for the presence of workforce and skills to facilitate sustainability projects.

Overall, the FDI picture in Europe is positive for the future. This is despite the ongoing war in Ukraine, which is a concern to investors.

EY’s report found that FDI in Europe showed a modest recovery of 5pc in 2021 compared to 2020.

In 2020, the Covid-19 pandemic caused investment levels to drop by 13pc. The recovery over the past year was somewhat mixed, with relatively stronger performance in some southern European countries.

France led the way in 2021 with 1,222 FDI projects, up 24pc on the previous year. Investment in the UK remained steady, increasing by 2pc to 993 projects. Germany fared less well, with the number of projects there falling by 10pc to 841.

10 things you need to know direct to your inbox every weekday. Sign up for the Daily Brief, Silicon Republic’s digest of essential sci-tech news.

Blathnaid O’Dea was a Careers reporter at Silicon Republic until 2024.