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Businesses optimistic on foreign direct investment despite COVID-19 turmoil

by LLB Editor
28th May 20 1:11 pm

Analysis reveals that the COVID-19 pandemic disrupted many business plans leading to the delay or cancellation of 35% of 2019 foreign direct investment (FDI) projects into Europe, according to the 20th edition of EY Europe Attractiveness survey.

This comes as analysis of 2019 projects highlights stronger YoY performance compared to the 2018 (0.9%, up from -4%)

Based on research conducted in April 2020, 49% of respondents believe Europe is at risk of becoming a less attractive investment destination amid concerns over future economic instability as a result of the pandemic. However, in the near-term, investors remain bullish, with 51% of business leaders expecting a minor decrease in the number of new projects initiated, while 11% of respondents expect no deviation from their plans in 2020.

Alongside this, 80% of leaders surveyed in April 2020 stated that government stimulus packages influence their investment decisions and will favor nations with stronger COVID-19 pandemic stimulus support measures in place.

The survey finds that to retain its place as an attractive continent for investment, Europe must act decisively and react to the three megatrends which the research highlights: technology adoption, sustainability and supply chain resilience as these will influence investment decisions.

Julie Teigland, EY EMEIA Area Managing Partner said, “While some industries are under more strain than others due to COVID-19, it is positive to see that only a quarter of business leaders surveyed believe their investment plans will be delayed.

“As a continent, Europe has a lot to offer, from highly skilled professionals to resilient supply chains. However, to reframe its future in a post-COVID world and remain attractive, European nations must take a step back and review the opportunities and challenges business and consumer face as a result of the COVID-19 pandemic.”

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