This document provides an overview and analysis of global foreign direct investment (FDI) trends in 2008 from the Financial Times Ltd's FDI research division. It summarizes that while the economic crisis began impacting investments in the third quarter of 2008, the effects on real investment were less severe than on financial flows. China was the top destination globally for FDI projects, capital expenditure, and jobs created that year. The document also provides rankings and analyses of top investing countries, cities, and sectors for various regions pre- and post-crisis. It concludes with an investor intentions survey indicating Asia and Europe will see the most increased investments in 2009, especially in R&D, sales, and manufacturing functions.
1. FOREIGN DIRECT INVESTMENT:
TRENDS AND PERSPECTIVES POST CRISIS
POST-CRISIS
Insight and intelligence from the Financial Times Ltd
29 June 2009
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2. ABOUT US: Introducing fDi Intelligence
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• The Financial Times Ltd’s dedicated division for foreign direct
Ltd s
investment, corporate location and investment promotion
• The largest private-sector FDI research centre, with 40 economists,
analysts and specialists as well as the magazine team
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3. A LOOK BACK AT 2008
• A record year for greenfield investment (+30% over 2007)
• Economic crisis starting to bite in Q3
• M&A market hit severely but …
severely,
• Effect of global slowdown and credit crunch on ‘real’
investment less dramatic than on overall foreign investment
flows
• China the top destination market by number of p j
p y projects,
,
capex and jobs created
3
4. Top 5 Global Destination Countries - 2008
p
140
1600
120
1400
1200 100 China
China
1000 80 USA
India
800 India
USA 60
Russia
600 UK 40 Vietnam
400 France
20
200
0 0
No of Projects Capex ($bn)
500,000
450,000
400,000
350,000 China
300,000
300 000 India
250,000
Russia
200,000
150,000 Romania
100,000
100 000 Vietnam
50,000
0
New Jobs Created
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5. Top 5 Global Destination Cities - 2008
p
25
350
20
300
15 Dubai
250 Dubai London
10
London Shanghai
200 Shanghai 5
Tunis
Beijing 0
150 Bucharest
Paris Capex ($bn)
100
100,000
100 000
50
80,000
0 Bucharest
No of Projects
60,000 Dubai
40,000 Shanghai
Moscow
20,000 St. Petersburg
0
New Jobs Created
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6. Top 5 Destination Countries in the Eastern
part of Europe - 2008
600 Russia 100 Russia
400 Poland Romania
50
200 Romania Poland
0 Turkey 0 Turkey
No of Projects Hungary Capex ($bn) Bulgaria
300,000 Russia
200,000
200 000 Romania
100,000
Poland
0
New Jobs Turkey
Created Bulgaria
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7. Top 5 Destination Cities in the Eastern part
of Europe - 2008
150 15
Moscow Bucharest
100 Bucharest
10 St. Petersburg
St. Petersburg 5 Moscow
50
Warsaw Gniew
0 Istanbul 0 Istanbul
No of Projects Capex ($bn)
100,000
Bucharest
50,000 Moscow
St. Petersburg
0 Warsaw
New Jobs Istanbul
Created
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8. FDI INTO UKRAINE
• 2008 performance: 123 projects, $6.73bn capex, 578 jobs
• Marginal increase over 2007 by project numbers and capex,
but significant decrease in # of new jobs created
• Top investors 2003-2009: Metro (Germany), PKO Bank
Polski (Poland), RZB (Austria), Lukoil (Russia), UniCredit
(Italy) and VS Energy International (Netherlands)
• Leading sector since 2003: financial services (16% of
p j
projects))
• Leading business activity: manufacturing (24%)
• Top source markets: Russia, Germany and US
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9. UKRAINE: GROWTH AREAS
• Fastest growing sector is real estate (by # of projects):
123% growth p.a. on average
• Other growth sectors: hotels/tourism (+83%), food and
( 83%),
tobacco (28%), financial services (26%), consumer goods
(23%) and communications (23%),
• Fastest growing business activity is logistics, distribution
and transportation: 91% growth p.a.
• Other growth activities: sales, marketing and support (71%),
construction (63%) and business services (28%)
• M
Manufacturing saw decline of avg 5% year on year
f t i d li f
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10. GLOBAL OUTLOOK FOR 2009
• Decline of 13% predicted in the number of greenfield FDI
projects in 2009
• Greenfield investment in developed economies expected to
fall significantly more than this
• Investment in developing economies expected to achieve
p g p
similar levels to 2008
• Recession brings a shift in focus for FDI flows
• Key trends: shifts to developing countries and rapidly
urbanising cities, and to services and enviro tech sectors
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11. SECTOR RISK ASSESSMENT
High risk Medium risk Low risk
•Construction •Power equipment •Low-carbon sector
•Real estate •Aircraft manufacture •Health services**
•Financial services •International tourism •Social services
•Building materials
g •Accounting g •Education
•Architecture •Media •Food & agriculture
•Engineering services •Consulting and PR •Domestic tourism
•Wood products •Software & ITIT* •Internet retailers
•Motor-vehicle retail •Retailing (non-food) •Mobile telecoms
•Consumer goods •Tobacco manufacture •R&D and testing
•Personal services
P l i *ERP, CRM, open source, ITO resilient. •Utilities
Utiliti
Other areas may decline
•Auto manufacturing •Defence
•Hardware/electronics •Pharma
•Apparel manufacture •Energy & mining
•Chemicals •Transportation
Source: fDi Intelligence from the Financial Times Ltd **growth expected 11
12. fDi INVESTOR INTENTIONS SURVEY
Where companies plan to increase investments in 2009:
• Asia is the top region, with more than a third of companies surveyed
planning to increase investments there
• Second is Europe, where more than a quarter plan to increase
investments
est e ts
• North America, Latin America and Middle East followed, with just under
a quarter of companies planning to expand in these markets
• Africa i h fourth region li d ( 10%)
Af i is the f h i listed (<
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13. INVESTOR INTENTIONS SURVEY
Which business functions anticipated investments will involve:
p
• The two most commonly cited were R&D and sales, marketing and
support (tied) with nearly a quarter of companies planning to expand
these functions
• Second was manufacturing (roughly 15%)
• Followed b (i order of i
F ll d by (in d f importance):
t )
- Logistics, distribution and transportation; business services (tied)
- Design, development and testing
g , p g
- Construction; electricity; and maintenance and servicing (tied)
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14. For more information, please contact:
p
Courtney Fingar
Editor
fDi Magazine
Tel: (+44)(0)20 7775 6365
Email: Courtney.Fingar@FT.com
www.fdimagazine.com
Inna Schlepina
Business Development Manager
fDi Intelligence
Tel: +44 (0) 207 775 6014
Email: Inna Schlepina@FT com
Inna.Schlepina@FT.com
www.fdiintelligence.com
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