EY report claims 80pc of FDI projects in Ireland will continue, despite Covid-19

29 May 2020

Image: © Joe Houghton/Stock.adobe.com

According to a new EY report, the majority of foreign direct investment projects in Ireland will go ahead despite the impact of Covid-19.

While many industries are in turmoil as a result of the Covid-19 pandemic, a new report from EY predicts that foreign direct investment (FDI) in Ireland will not be hit as hard as other areas. The EY European Attractiveness Survey estimated that at least 80pc of FDI projects are likely to be maintained this year.

By contrast, it is expected that market uncertainty will see only 65pc of FDI projects across Europe being delivered on time. A quarter of projects are expected to be delayed and 10pc to be cancelled.

The focus of the report was analysing FDI performance across 47 countries, most of which are in Europe. It showed Ireland was the eighth-most attractive location for FDI in Europe last year, up from 10th in 2018.

The number of FDI projects in Ireland totalled 191 last year, with the country coming first in the rankings for the greatest number of projects per million population. However, the number of investment projects was down 7pc on 2018.

Nearly two-thirds (61pc) of all projects in 2019 came from the US, with business services, digital and finance sectors attracting 69pc of all new project last year.

Across Europe, the number of FDI projects totalled 6,412, which is a marginal increase of 0.9pc on 2018.

Preparing for future shocks

France was the overall leader in Europe with 1,197 FDI projects last year, marking a 17pc increase on 2018. Despite Brexit uncertainty, FDI in the UK climbed 5pc (with 1,109 projects in 2019), placing it second in the rankings but losing its top rank for the first time. Investment in Germany was in third place (971 projects). Spain took fourth place, attracting 486 new projects and representing a 55pc increase.

Among the other countries making the top 10, Poland and Turkey showed a substantial decrease in FDI last year of 26pc and 33pc, respectively. However, a noticeable winner outside the top 10 was Slovakia, which saw a 110pc increase in FDI projects, reaching a total of 65.

Speaking of the findings, Feargal De Freine, partner and head of FDI at EY Ireland, said the country must be agile to “ensure we are prepared for future shocks”.

“This pandemic has highlighted the economic vulnerability of certain segments of society and demonstrated that the vulnerability of some increases the vulnerability of all,” he said.

“Businesses and governments should do all they can to protect not only the most vulnerable sectors but also the most at-risk people, including part-time, independent and gig workers.”

Colm Gorey was a senior journalist with Silicon Republic