Foreign Direct Investments: European Cities and Regions of the Future 2024
Johannes Heidecker
Economic advisor, supporting companies and countries in ???? Western, Central and South East Europe to do better business
fDi Intelligence has ranked 330 European cities; divided by population size into five groups — major, large, mid-sized, small and micro cities —; as well as 141 European regions, divided into three groups — large, mid-sized and small regions. Everything was ranked by performance across five subcategories:
Concerning ‘FDI Strategy’, a judging panel reviewed 117 submissions from cities and regions across Europe. This is the only qualitative category in the otherwise data-driven ranking that feeds into the overall results.?
Skopje ranked first in the mid-sized cities - cost efficiency section. In the same section, Wroc?aw in human capital, business friendliness and overall, Zürich in economic potential and Duisburg in connectivity. Wroc?aw also scored 3rd in FDI strategy. Vilnius, Riga, Bratislava and Tallinn were other Central & South-East European cities in the top 10 overall.
Skopje region ranked fourth in the small region - cost efficiency section.
General conclusions are that investments have dipped but remain attractive for investors in batteries and data centers. Renewables take the biggest share with about 1/3rd of announced European FDI in 2023. 43 projects are above $1 bil., of which four data center projects.
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Also remarkable the rise of FDI Nearshoring in manufacturing close to Europe (see article). More FDI was pledged in 2023 than ever before. Hungary, Poland, Egypt and Morocco have seen the biggest wins in the top 15 countries. The mean average announced capital expenditure (capex) for each manufacturing FDI project in the 15 countries increased from $44.5m in 2019 to $130.8m in 2023. Manufacturing FDI into Romania, Slovakia and North Macedonia all more than doubled in the latest two-year period, compared to 2018/19. North Macedonia’s FDI inflows show fluctuations over the past years. In 2017, the country hit record low FDI inflows with $89.2m. After the decision to change its name to North Macedonia and the pandemic, North Macedonia increased its foreign investment inflow.?The finalisation of the announced investments in solar, wind and other energy projects have a big influence on the numbers.
According to the data from the National Bank, investment flows have varied between 182 mio € in 2017 and 745 mio € in 2022, in 2023 they reached 617 mio €. Can these numbers be compared? Somewhat. Announced investments need "an announcement", each large project comes with one big number. National Banks report on money flow, and these flows come over several years. The real number is equity, because this also contains reinvested earnings. Following a chart with Direct investment stock and its variation year over year (right axis)
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