WASHINGTON, April 26, 2015 /PRNewswire/ -- Two-thirds of
companies plan to return to pre-financial crisis levels of foreign
direct investment (FDI) by 2016, according to the 2015 FDI
Confidence Index® from global strategy and management
consulting firm A.T. Kearney. The Index's 15th edition,
Connected Risks: Investing in a Divergent World, finds
that business leaders are increasingly seeking global opportunities
for growth.
"Investors desperately want to put the last financial crisis in
the rearview mirror, and they are setting their sights on new
destinations for their capital," says Paul
Laudicina, founder of the FDI Confidence Index and chairman
of A.T. Kearney's Global Business Policy Council. "While
market volatility and economic uncertainties may create periodic
speed bumps in our interconnected world, these findings point to
reinvigorated cross-border investment. With the right strategic
insight and analysis, global opportunities abound for those who
know where to look."
The FDI Confidence Index offers an in-depth view of
forward-looking global investment sentiment from senior executives.
Since its inception in 1998, the study has consistently pointed
toward top choices globally for foreign direct investment, with FDI
destinations ranked in the Index receiving the majority of global
FDI inflows about a year after the survey results are
released.
In this year's Index, 66 percent of companies plan to return to
their pre-financial crisis levels of foreign direct investment
(FDI) by 2016, with Asian investors revealing the strongest
commitment to restoring pre-recession levels. Nearly three-fourths
of countries ranked in the top 25 are from developed economies, as
investors see new opportunities as safe ground.
For the third year in a row, the
United States and China are
ranked first and second as target countries for investment, while
the United Kingdom continues its
three-year rise to claim third position. The United States leads all countries when it
comes to investors' positive macroeconomic outlook, with 46 percent
of those surveyed more optimistic in their outlook for the U.S.
economy than they were a year ago, and 44 percent expecting GDP
growth of about 3.6 percent over the next three years. The global
executives indicate that even continued gridlock in Washington is unlikely to diminish their
interest in investing in the United States.
Asian investors are particularly optimistic about the growth
outlook in the Americas, and overall, they are less concerned than
others about geopolitical instability and the regulatory
environment of destination countries, expressing the strongest
interest in frontier markets. More than 80 percent of Asian
investors say they are currently interested in maintaining,
commencing, or increasing investments in these countries.
"With their focus on developed economies large and small,
investors across the world are looking for a known and secure port
of call," says Erik Peterson,
managing director of the Global Business Policy Council and
co-author of the study. "The 2015 FDI Confidence Index is an
excellent window into the thinking of global business executives
who are managing risk in a year of growing divergence in monetary
policy between the world's major economies."
Each region's findings tell compelling, connected stories seen
through the lens of the FDI Confidence Index, with many of the
winners reaching newfound stability after navigating post-recession
turbulence.
Survey highlights
Americas: The United States
maintains its top ranking for the third straight year. The U.S.
administration has repeatedly cited the last two years' studies as
a proof point of the resurgence of the domestic economy.
Canada remains in the top five,
holding onto 4th place. Brazil
maintains the highest ranking in Latin
America, ranking 6th overall, although it sags from its
third place ranking in 2013. Despite its sluggish economic growth,
investors remain attracted by Brazil's large domestic market, growing middle
class, and natural resource base. Mexico gains three spots to rank 9th as the
new reform agenda continues to improve the country's business
climate. Significant energy sector reforms are planned for
Mexico in 2015 despite low oil
prices.
Europe: This region has
unprecedented executive interest this year, with 15 countries
ranked in the top 25. Fueled in part by the European Central Bank's
decision to move from austerity to stimulus through quantitative
easing, the region's 60 percent share of the Index is a sharp rise
from 40 percent in 2014. Countries moving up the Index include
third-ranked United Kingdom, which
continues a three-year rise in the rankings, and fifth-ranked
Germany, a source of eurozone
stability and sound economics. The
Netherlands climbs nine spots to 13th place, behind efforts
to increase foreign investment under the brand "Invest in
Holland" and to build Europe's best-connected and largest start-up
ecosystem through its "StartupDelta" program. France moves up two spots to 8th as the
government implemented tax incentives, simplified administrative
procedures, and eased restrictions on investment activities.
Asia: China ranks second as respondents watch for
GDP growth to reach 7.0 percent, and for continued signs of its
successful transition to a consumption-led economy. Japan, following its "lost decades" and
economic stagflation, surges to 7th from last year's
19th position. Its impressive 12-place gain may be a
sign that the third arrow of the Abe administration's growth
strategy will make the country more attractive for FDI flows. Asian
economies, which attract more than 40 percent of global foreign
direct investment, continue to show growth driven by domestic
consumer markets. Tenth-place Australia recently finished negotiations for
three landmark trade agreements, including bilateral trade deals
with China, Korea and Japan. India
is 11th and may see future rankings rise quickly if the "Modi
magic" of the current government succeeds in implementing plans to
boost economic growth and modernize the bureaucracy. This includes
the "Make in India" initiative,
which aims to improve the ease of doing business in India, and remove or relax foreign equity caps
in several areas.
The 2015 FDI Confidence Index®
Country
|
2015
Rank
|
2014
Rank
|
2013
Rank
|
2014-2015
Change
|
United
States
|
1
|
1
|
1
|
0
|
China
|
2
|
2
|
2
|
0
|
United
Kingdom
|
3
|
4
|
8
|
+1
|
Canada
|
4
|
3
|
4
|
-1
|
Germany
|
5
|
6
|
7
|
+1
|
Brazil
|
6
|
5
|
3
|
-1
|
Japan
|
7
|
19
|
13
|
+12
|
France
|
8
|
10
|
12
|
+2
|
Mexico
|
9
|
12
|
9
|
+3
|
Australia
|
10
|
8
|
6
|
-2
|
India
|
11
|
7
|
5
|
-4
|
Italy
|
12
|
20
|
__
|
+8
|
Netherlands
|
13
|
22
|
__
|
+9
|
Switzerland
|
14
|
14
|
18
|
0
|
Singapore
|
15
|
9
|
10
|
-6
|
South
Korea
|
16
|
__
|
21
|
N/A
|
Spain
|
17
|
18
|
16
|
+1
|
Sweden
|
18
|
16
|
__
|
-2
|
Belgium
|
19
|
21
|
__
|
+2
|
Denmark
|
20
|
23
|
__
|
+3
|
Austria
|
21
|
__
|
__
|
N/A
|
Turkey
|
22
|
24
|
__
|
+2
|
Poland
|
23
|
__
|
19
|
N/A
|
Norway
|
24
|
__
|
__
|
N/A
|
Finland
|
25
|
__
|
__
|
N/A
|
About A.T.
Kearney
A.T. Kearney
is a leading global management consulting firm with offices in more
than 40 countries. Since 1926, we have been trusted advisors to the
world's foremost organizations. A.T.
Kearney is a partner-owned firm, committed to helping
clients achieve immediate impact and growing advantage on their
most mission-critical issues. For more information, please visit
www.atkearney.com.
About the 2015 Foreign Direct Investment Confidence
Index®
The FDI Confidence Index® is constructed using primary
data from a proprietary survey administered to senior executives of
the world's leading corporations. Respondents include C-level
executives and regional and business heads. The participating
companies represent 27 countries and span all industry sectors. All
companies in the survey report global revenue of more than
$500 million, and nearly one-half
report more than $1 billion. To
reflect the increasing influence of developing markets in FDI, this
year more than one-third of respondent companies were headquartered
in developing countries. The survey was conducted in January
2015.
The Index is calculated as a weighted average of the number of
responses indicating high, medium, and low likelihood of direct
investment in a market over the next three years. Index values are
based on non-source-country responses. For example, the Index value
for the United States was
calculated without responses from U.S.-based corporate investors.
Higher Index values indicate more attractive investment targets.
The sample of countries included in the survey account for
approximately 90 percent of FDI inflows.
FDI flow figures are the latest statistics available from the
United Nations Conference on Trade and Development (UNCTAD). Other
secondary sources include investment promotion agencies, central
banks, ministries of finance and trade, and other major data
sources
For past editions of the FDICI, please visit
www.atkearney.com/gbpc/foreign-direct-investment-confidence-index.
Media Contact:
Abby Klanecky
Abby.Klanecky@atkearney.com
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