Greenfield FDI Declines in 2010, With Recovery Predicted for 2011By Fdi Intelligence, PRNE
Wednesday, April 13, 2011
LONDON, April 14, 2011 - The global FDI market declined in 2010 due to weak performance from
Western Europe and the Middle East while manufacturing investment grew
strongly in emerging markets and North America, according to the fDi Global
Outlook Report 2011 published today by fDi Intelligence, part of the
Financial Times Ltd.
Greenfield foreign direct investment, a key driver of economic growth and
recovery, declined again in 2010 for the second year running with a 16%
decline in capital investment and 0.38% decline in project numbers, according
to the report. The 2 million new direct jobs created by FDI projects in 2010
were the lowest recorded over the past five years.
Despite the decline in global FDI, the manufacturing sector saw robust
growth in 2010, with a 21% increase in project numbers and 25% growth in new
job creation, as companies invested in expanded capacity to meet demand
created by the global economic recovery and with the continued attractiveness
of emerging markets for manufacturing investment.
Western Europe was the worst performing region for greenfield FDI in
2010, with a 15% decline in project numbers and over 25% decline in capital
investment and new job creation last year. Lackluster economic performance,
sovereign debt crises, and a continued strong euro weighed heavily on
companies' decisions to invest in the region, according to the report.
As the growth divide between Western Europe and other key regions of the
world economy widens, FDI is gravitating to the faster growing economies in
the East and in the Americas. The eastern half of Europe, North America and
Asia-Pacific all saw growth in FDI project numbers in 2010 and Latin America
was the only region to attract a higher volume of greenfield capital
investment than the previous year.
Recession-proof Brazil and Australia recorded the largest increases in
greenfield FDI in 2010, with companies committing record levels of projects
and capital investment to these countries. Greenfield FDI projects in Brazil
increased by 28% in 2010 and in Australia by 39.5%, according to the Global
Outlook Report, with both countries moving into the top 10 locations in the
world for FDI.
While Brazil and Australia, with their diversified economies, achieved
record performance in attracting greenfield investment the Middle East
experienced another collapse in FDI with capital investment down 45% in 2010
indicating that commodities and real estate alone are not sufficient to
achieve sustained FDI and economic development.
Foreign investors are facing a fast changing economic and political
landscape, which will have a major impact on FDI in 2011. In Europe, the
sovereign debt crisis is dampening growth and heightening risk in peripheral
countries with spill-over effects on the larger economies while at the same
time a resurgent Germany, benefiting from economic growth in other parts of
the world, is reinforcing the strong euro. Greenfield FDI into peripheral
economies and closely linked countries like the UK and Spain is likely to
decline in 2011 while outward FDI from Germany expands strongly.
Political instability in the Middle East and Africa will have a major
impact on FDI into this region with a sharp decline expected in 2011 in
countries most affected. Combined with the nuclear crisis in Japan, FDI in
coal, oil, and natural gas and especially in renewable energy is likely to
grow strongly in 2011, with renewable energy expected to be the fastest
growing sector for FDI in 2011 and in subsequent years.
With emerging markets expected to receive a growing volume of greenfield
FDI in 2011, in particular China, India, Brazil, Russia, Mexico and
Indonesia, fDi Intelligence is predicting a 6.5% growth in global FDI
projects in 2011.
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Report downloadable following free registration
www.fDiIntelligence.com/GlobalOutlook - 18 April 2011
Notes to editors
About Global Outlook Report:-
The Global Outlook Report 2011 is based on the fDi Markets database
(fDiMarkets.com) of greenfield crossborder investment, which tracks companies
announcing and considering FDI projects worldwide. Over 20,000 media,
industry, and government sources are used to identify FDI projects. Further
research captures additional information including the actual and estimated
capital investment and job creation of each project. fDi Markets is the
industry leading barometer of trends in greenfield FDI and is the source of
FDI project data for both the UNCTAD World Investment Report since 2003 and
the Economist Intelligence Unit as well as over 100 governments around the
About fDi Intelligence
fDi Intelligence, from The Financial Times Ltd, is the leading provider
of foreign direct investment intelligence.
Please state the source as fDi Magazine from the Financial Times Ltd.
Tags: April 14, England, Fdi Intelligence, London