Global Outlook report from FDIntelligence


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Global Outlook report from FDIntelligence

  1. 1. Special RepoRt www.fDiintelligence.comManufacturingmakes a comeback FDI GLOBAL OUTLOOK REPORT 2011PRODUcED By PUBLIshED By
  2. 2. CONTENTS Published by The Financial Times Ltd, Number One Southwark Bridge, London SE1 9HL, UK Tel: +44 (0)20 7873 3000. Editorial fax: +44 (0)20 7775 6416. Staff members can be contacted by dialing +44 (0)20 7775 followed by their extension number Editor-in-Chief Brian Caplen 6364 Editor Courtney Fingar 6365 Deputy Editor Spencer Anderson 6848 Contributing Editor Ginanne Brownell Production Editor Richard Gardham 6367 Deputy Production Editor Andrea Crisp 6338 Head of Design Leo Cooper 6537 Head of Production Denise Macklin 6557 International Sales Manager Charlotte Lloyd 6322 Associate PublisherLuke McGreevy +971 (0)4 391 4398 Managing Director Caspar de Bono 6651 Publishing Director Angus Cushley 6354 OVERVIEW Head of Online Publishing & Marketing – Global Finance Davinia Powell 6449 02 Last year saw further drops in FDI levels globally, though the rate of decline slowed markedly. The precarious nature of the economic recovery poses a threat to FDI prospects for 2011, but fDi Intelligence expects greenfield projects to return to growth in the coming year. By Henry Loewendahl. Customer Services Manager SOuRCECOuNTRIES Gbenga Adenubi 6256 Controlled circulation 06 Despite a drop in overseas projects, western Europe has retained its position as the world’s leading source region for FDI, while the Middle East continued its decline. Kevin Phillips 6551 dESTINaTIONCOuNTRIES Subscriptions/ Customer services 08 Asia-Pacific has retained its position as top FDI destination region, while the US remains the lead destination country and Singapore stays at the helm of the city rankings. WDIS, Units 12–13 Cranleigh amERICaS 10 Gardens Industrial Estate, Last year was a good year for both the US and Canada in FDI terms, with California and Ontario topping Southall, Middlesex UB1 2BD the state rankings. Meanwhile in Latin America, Brazil overtook Mexico as the leading FDI country for the first time since 2005. tel: 0845 456 1516 (customerservices) 01858 438417 (overseas), aSIa-PaCIfIC 13 fax: +44 (0)20 8606 7546 Asia-Pacific’s rise up the FDI rankings shows no sign of slowing, driven by the behemoth economies of China and India. However, when it comes to growth it is Australia that was the region’s star performer in 2010. One-year subscription rates £295 for fDi Magazine and full EuROPE 15 access to; London and the UK still top the European charts, but for FDI growth in Europe the countries in the east, £225 for fDi Magazine only such as Russia and Poland, are the continent’s big story. Please contact us for details of other currencies mIddlEEaST&afRICa Registered Number: 227590 (England and Wales)ISSN: 1476-301X © Financial Times Ltd 2011. FDI is a trademark of Financial Times Ltd 2011. “Financial Times” and “FT” are registered trademarks and ser- vice marks of the Financial Times Ltd. All rights 18 The Middle East and Africa witnessed a torrid 2010 in FDI terms, with few countries showing any signs of recovery. Indeed, those that managed to show meaningful growth did so from a very low starting point. reserved. No part of this publication may be repro- duced or used in any form of advertising without SECTORS 21 The software and IT sector saw increased FDI in 2010, pulling ahead of financial services as the leading prior permission in writing from the editor. No responsibility for loss occasioned to any person act- ing or refraining from acting as a result of material in this publication can be accepted. On any specific sector for FDI projects in 2010. matter, reference should be made to an appropriate adviser. Registered Office: Number One Southwark Bridge, London SE1 9HL, UK BuSINESSaCTIVITIESReprints are available of any fDi magazine article, with your company logo and contact details inserted if required (minimum order 100 copies). For details telephone 0207 873 4816. 24 Manufacturing was the leading activity for FDI in 2010 with a 20% growth in projects and, along with sales marketing and business services, accounted for two-thirds of global FDI projects for the year. For one-off copyright licences for reproduction of fDi magazine articles telephone 0207 873 4871. CONCluSION 26 Alternatively, for both services e-mail In terms of sectors, source countries and destination countries, FDI trends in the short and medium term are looking particularly favourable for four emerging markets, according to fDi Markets’ new investor signals tracking service. By Henry Loewendahl. April/May 2011 1
  3. 3. OveRvIewFDI’s cautiousrecovery WLAsT YeAr sAW FUrTHer hile the world economy 19.7% and job creation by 64.5%, making it theDrOPs In FDI LeVeLs GLOBALLY, rebounded with solid GDP fourth biggest country in the world for green- growth in 2010, investors field investment and jobs. Brazil was behindTHOUGH THe rATe OF DeCLIne remained cautious about their only China, India and the US when it came tosLOWeD MArKeDLY. THe foreign expansion plans. job creation in 2010. The country experiencedPreCArIOUs nATUre OF THe The number of greenfield FDI very strong growth in inward investment ineCOnOMIC reCOVerY POses A projects declined fractionally by the renewable energy, electronics, chemicalsTHreAT TO FDI PrOsPeCTs FOr 0.38% in 2010, following a decline and food and beverages sectors in particular.2011, BUT fDi InTeLLIGenCe of 17.3% in 2009. Greenfield capital Australia also performed strongly in 2010,eXPeCTs GreenFIeLD investment fell by 16% in 2010, on with a 39.5% increase in FDI projects (moving top of the 36% decline in 2009, due it from 16th place in 2009 to ninth in 2010)PrOJeCTs TO reTUrn TO to major declines in the capital-inten- and a 2.5-fold increase in capital investment,GrOWTH In THe COMInG YeAr. sive natural resources and real-estate catapulting the country from 16th place inBY henry loewenDahl sectors. Job creation by greenfield 2009 to fifth place in 2010. Poland and Canada investors also declined by 4% last year. also recorded very strong growth of FDI pro- Lacklustre economic recovery, exchange jects in 2010, with 33.7% growth in project rate instability and the sovereign debt crisis numbers in Poland (although the 254 projects weighed heavily on investors’ FDI plans for attracted in 2010 were still far below the peak Europe, with a 15% decline in greenfield FDI of 355 in 2008) and 16.3% growth in project projects in western Europe in 2010 – a larger numbers in Canada. decline than in any other region. With a fur- ther scaling back of investments in real estate uS and china consolidate lead and natural resources, FDI in the Middle East While Brazil, Australia, Poland, Canada and continued to decline, with a 45% fall other countries achieved faster growth in FDI in capital investment in 2010. in 2010, the US and China further consoli- dated their market share dominance. With brazil and australia thrive strong growth in FDI into both US and China, Brazil moved rapidly up the rankings of the their combined market share of global FDI leading FDI locations in the world in 2010. projects increased from 17.7% in 2009 to With 28% growth in greenfield FDI projects, 20.3% in 2010. The countries’ combined Brazil was the seventh leading location for share of global capital investment remained projects in 2010, up from 11th place in 2009. unchanged at 17.6% in 2010. Capital investment into Brazil increased by The overall ranking of the world’s leading2 April/May 2011
  4. 4. locations for FDI remained unchanged in 2010in terms of number of greenfield FDI projectsattracted, with US at the top followed by InDIan, soUthChina, UK, India and’s big four expand rapidly Korean, JapaneseIndian, South Korean, Japanese and Chinesecompanies were among the fastest growinginvestors overseas in 2010. Indian companiesestablished 24% more FDI projects overseas in2010, making India the ninth largest investorby number of projects in 2010. Indian firmscreated 43% more jobs overseas, moving the anD chInese coMpanIes werecountry from 18th place in 2009 to 10th placein 2010 by number of jobs created overseas.Indian companies accelerated investment aMong theoverseas across different industries, with thebiggest growth in the business services, met-als, software and IT, and leisure and entertain- fastest growIngment sectors. Indian companies expandedfastest in the UK, but the US and Gulf statesalso attracted increased FDI. South Korean FDI projects overseasincreased by 12.5%, with capital investmentup 36% and job creation up 50% in 2010.South Korea moved up the rankings to be the InVestors oVerseas In 2010sixth largest global investor overseas in 2010in capital investment and the fifth biggestcreator of overseas jobs. The fastest growth bySouth Korea’s firms overseas was in the elec-tronics, automotive and plastics sectors. There was a 13.9% increase in FDI projectsoverseas from Japan in 2010 and a 25% April/May 2011 3
  5. 5. Building up: manufacturing was the major sector growth story in 2010. overall fDI manufacturing projects grew by 20% in the year increase in job creation, as Japanese companies 2010 was the major growth in manufacturing established larger projects overseas. Japanese sectors. Overall, the number of FDI projects in companies were the second largest creator of manufacturing sectors grew by 20% in 2010, jobs overseas, after the US. Chinese firms also and job creation grew by about 25%. increased the number of jobs created overseas The metals and automotive original equip- by 10% and capital investment by 2.5% in 2010. ment manufacturer (OEM) sectors had the big- China ranked eighth in the world by capital gest absolute increase in capital investment investment and job creation overseas. overseas in 2010, with 43% and 34% growth, respectively. In 2010, the metals sector became Software and IT top sectors the second major sector for capital investment With a 5.4% growth in FDI projects in 2010, globally (after coal, oil and natural gas) and software and IT replaced financial services as automotive OEM the third biggest sector. the leading sector for greenfield FDI projects Real estate was again one of the worst per- in 2010. FDI projects in financial services fell forming sectors, with a more than 50% decline by 5% in 2010. However, the main trend in in capital investment overseas in 2010. Capital investment in 2010 was less than one-fifth the level of 2008. Creative industries and environmental technology, which have been the two fastest growing sectors for FDI, remained relatively flat in 2010, with 1.9% and 0.3% increases in projects, respectively. However, their market share of global FDI increased marginally fromfDi IntellIgence 5.1% in 2009 to 5.2% in 2010 for creative indus- tries and from 5.2% to 5.3% for environmental technology.Is expectIng a Recovery forecast The FDI forecasting unit of fDi Intelligence is6.5% growth In expecting a 6.5% growth in greenfield FDI in 2011, with most countries attracting more greenfield FDI in 2011 than 2010. StronggreenfIelD fDI growth is expected in the automotive, indus- trial machinery and equipment, metals and chemicals sectors in particular. Renewable energy should also recover in 2011 and growIn 2011 strongly. fDi Intelligence also expects growth in natural resources investment in 2011, after a sharp decline in 2010, although this will depend on the easing of political instability in the Middle East and north Africa. Slower growth in FDI is expected in business services, financial services, and food and beverages. ■4 April/May 2011
  6. 6. FDI TrenDs OveRvIew Global FDI by nUMber oF ProjeCts anD CaPex, 2003-2010 In FOcuS 16,000 Number of projects 1600 Global FDI shows Capex Green shoots 14,000 1400 fDi Intelligence reported a decline 12,000 1200 in greenfield FDI projects of 17.3% in 2009, with associated capital 10,000 1000 Capex ($bn) investment and job creation falling byProjects 8000 800 more than one-third. the latest figures 6000 600 released by the fDi Markets databases reveal that although FDI fell in 2010, 4000 400 the pace of decline has slowed MAY SEP 2000 200 markedly and many segments of the 0 0 global FDI market recorded strong 2003 2004 2005 2006 2007 2008 2009 2010 positive growth. note: Includes estimates source: fDi Markets In 2010, fDi Markets tracked a total of 12,047 FDI projects with associated investment of an estimated $748.8bn, creating an estimated Global FDI by nUMber oF ProjeCts anD CaPex, 2010 2,035,593 jobs. the number of FDI 1400 Number of projects 100 projects in 2010 was marginally down by 0.38% on 2009 figures. total capital 1200 Capex investment and job creation in 2010 75 fell by 16% and 4% respectively – a 1000 much smaller decline than the 36% 800 Capex ($bn) fall in capital investment and 37% 50 fall in job creation in 2009.Projects 600 In 2010, the average capital 400 investment per project was $62m 25 with 169 jobs created, compared with 200 the average project size in 2009 of 0 0 $73.8m and 176 jobs created. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Monthly investment patterns note: Includes estimates source: fDi Markets throughout 2010 were relatively constant with slight dips in figures in april and august. the biggest capital investment project of the year occurred glObal FDI bY JObS glObal FDI bY JObS cReaTeD, 2003-10 cReaTeD, 2010 in February with Malaysian company Petronas announcing a $16bn YeaR JObS % change MOnTh JObS gROwTh investment in Gladstone, australia, with the aim of creating a joint venture 2003 1,868,465 n/a jan 183,389 n/a to develop and operate a gas pipeline. 2004 1,765,427 -6% Feb 143,181 -22% software and It services, business 2005 1,846,310 5% Mar 165,700 16% services and financial services rank as 2006 2,294,381 24% apr 110,120 -34% the top sectors for FDI in 2010, 2007 2,516,799 10% May 188,554 71% together accounting for almost 2008 3,375,735 34% jun 166,795 -12% one-third of global FDI projects. 2009 2,129,768 -37% jul 182,490 9% Manufacturing re-emerged as the top 2010 2,035,593 -4% aug 168,710 -8% activity in 2010 with a 21% increase in total 17,832,478 sep 192,901 14% manufacturing projects in 2010. average 2,229,060 oct 204,368 6% asia-Pacific remains the top note: excludes interstate and retail, includes estimates nov 174,917 -14% destination for investors, attracting source: fDi Markets Dec 154,468 -12% one-third of global FDI in 2010. the Us total 2,035,593 outperformed China for the second note: excludes interstate and retail, includes estimates year running as the top destination source: fDi Markets country in 2010 ranked by number of FDI projects, although China was number one when ranked by capital investment and job creation. Companies with their global headquarters in western europe accounted for 44% of global FDI projects in 2010. the rest of europe emerged as an important source market as companies headquartered there established one-fifth more FDI projects overseas in 2010 than in 2009. April/May 2011 5
  7. 7. Rising fast: companies from Seoul (above) made a big impact in 2010 with regards to overseas locations, but it was the more established places such as the US (top left) and London (bottom left) that dominatedFamiliar names topFDI source rankingsDespite a Drop in overseas projects, Rest of Europe rise and jobs created by African compa-western europe has retaineD its The ‘Rest of Europe’ region, nies overseas declined by 1% and comprising eastern Europe, south- 3%, respectively, in 2010.position as the worlD’s leaDing east Europe and Russia, replacedsource region for fDi, while the the Middle East as the fourth largest US leads greenfield FDIMiDDle east continueD its Decline source market for FDI projects fol- The US was again the leading source lowing a 20% increase in projects country for greenfield FDI, with US W estern European companies overseas in 2010. The Rest of Europe companies announcing 2800 FDI established 5302 FDI was the only region to see an projects overseas, more than double projects overseas in 2010, increase in capital investment the number of the second leading investing an estimated $298bn and overseas, which was up 17%. source country, the UK. The US creating an estimated 735,798 jobs. North America, Asia-Pacific and accounted for 25% of global FDI The region accounted for 44% of FDI Latin America and the Caribbean all projects, 16% of global capital projects overseas, despite a 4% year- had small year-on-year increases of investment and 20% of estimated on-year decline. outward FDI projects of 3%, 4% and jobs created. US companies FDI from Middle East companies 6%, respectively. Latin America and announced 113 more FDI projects continued its sharp decline in 2010, the Caribbean is the only region to overseas in 2010 than in 2009, the with companies setting up 15% have a year-on-year increase in the highest increase in overseas FDI fewer FDI projects in 2010, following number of outward FDI projects of any source country. a 32% decline in 2009. Capital invest- over the past seven years, indicating After the US, the UK, Germany, ment by companies headquartered the economic growth and dyna- Japan and France were the top in the region declined by more than mism of the region. However, with source countries for FDI in 2010. Of 50% in 2010, following a 59% decline only 2% of global FDI projects, the these countries, Japan experienced in 2009. Most notably Bahrain region still has a long way to go the biggest year-on-year increase in (-63%), Saudi Arabia (-45%) and before becoming a global player overseas FDI with a 14% increase in Kuwait (-26%) witnessed large nega- in outward FDI. the number of projects, while tive growth in FDI projects estab- Only 1.19% of global FDI projects France had the biggest decline of lished overseas. The current political were from African companies in 16%, with a 29% decline in capital crisis in the Middle East and north 2010, following another 12% year- investment overseas. Africa means that the region’s pros- on-year decline in the number of South Korean companies pects for 2011 are uncertain. overseas FDI projects. Investment recorded a 12.5% growth in FDI pro-6 april/May 2011
  8. 8. fDi trenDs SoURcES SeoUL-baSed companieS cReated moRe than 95,000 eStimated jobS oveRSeaS in 2010jects overseas in 2010. Associatedcapital investment increased by GLobaL FDI by SoURcE woRLD REGIon, 201036%, making the country the sixth SoURcE PRojEct % ch caPEx % ch job % ch REGIon nUmbERS on ’09 ($bn) on ’09 cREatIon on ’09largest investor overseas in 2010,up from 11th place in 2009. An esti- western europe 5302 -4% 297.78 -19% 735,798 -10%mated 106,443 jobs were created north america 3086 3% 212.12 -19% 451,761 0%overseas by South Korean companies asia-pacific 2417 4% 136.78 -4% 628,469 2%in 2010, 50% higher than in 2009, rest of europe 461 20% 30.36 17% 76,021 7%making the country the fifth biggest Middle east 354 -15% 38.02 -51% 82,342 -26%creator of jobs overseas in the world. latam & caribbean 284 6% 19.24 -6% 43,738 -4% africa 143 -12% 14.46 -1% 17,464 -3%London top source city Total 12,047 0% 748.75 -16% 2,035,593 -4%London remained the top source note: excludes interstate and retail, includes estimates; source: fDi Marketscity for FDI projects for the sixthyear running in 2010, with compa-nies headquartered there announc- GLobaL FDI by toP FIvE SoURcE coUntRIES, 2010ing 616 FDI projects (5% of the global SoURcE PRojEct % ch SoURcE caPEx % ch SoURcE jobS % chtotal), with estimated capital invest- coUntRy nUmbERS ’09 coUntRy ($bn) ’09 coUntRy cREatED ’09ment of $41bn and creating more us 2800 4% us 121.01 -13% us 415,453 2%than 70,000 jobs. uK 1140 -4% uK 61.81 -3% japan 213,361 25% Paris ranked second to London germany 1101 4% germany 60.88 0% germany 162,371 0%in terms of outward FDI projects japan 859 14% japan 57.98 -10% uK 131,272 -3%in 2010, although with a decline france 590 -16% france 39.53 -29% s Korea 106,439 51%in overseas projects of 19%, it led note: excludes interstate and retail, includes estimates; source: fDi MarketsNew York by only three projects.Tokyo was in fourth position withSeoul in fifth. GLobaL FDI by toP FIvE SoURcE cItIES, 2010 Seoul-based companies created SoURcE PRojEct % ch SoURcE caPEx % ch SoURcE jobS % chmore than 95,000 estimated jobs cIty nUmbERS ’09 cIty ($bn) ’09 cIty cREatED ’09overseas in 2010, 59% higher than london 616 -1% london 41.30 13% seoul 96,215 59%2009, ranking Seoul as the top paris 366 -19% paris 32.04 -29% tokyo 87,487 27%source city in the world in terms new York 363 17% seoul 31.94 38% london 72,332 4%of job creation overseas. These jobs tokyo 337 2% tokyo 17.83 -56% paris 62,372 8%were created as a result of 171 pro- seoul 171 13% Kuala lumpur 16.66 243% Detroit 51,569 221%jects and almost $32bn in estimated note: excludes interstate and retail, includes estimates; source: fDi Marketscapital investment – an increase of38% compared with 2009. Each of the 11 Japanese cities thatfeatured in the top 150 cities for FDIprojects overseas in 2010 witnessed anincrease in FDI projects in comparisonwith 2009. These cities accounted for6% of global FDI projects in 2010. ■ april/May 2011 7
  9. 9. Asia-Pacific growthstory continuesAsiA-PAcific hAs retAined its Position growing regions for greenfield nomic prospects and establishedAs toP fdi destinAtion region, while FDI in 2010, increasing 23% and larger projects.the Us remAins the leAd destinAtion 19%, respectively. However, the two regions attracted less capital invest- US stays ahead of ChinacoUntry And singAPore stAys At the ment than during 2009, down 20% For the second year running, thehelm of the city rAnkings in North America and 15% in the US attracted more FDI projects than Rest of Europe in 2010. any other country with 1331 pro- T he overall destination trends Western Europe, Africa, the jects, compared with 1158 in China. in 2010 remain the same as in Middle East and Latin America Both the US and China recorded 2009, with Asia-Pacific rank- and the Caribbean all faced a growth in FDI projects in 2010, ing as the top destination region decline in the number of FDI pro- with a 19% increase in the US and by number of FDI projects attracted, jects attracted in 2010. Western 13% increase in China. Their com- the US top destination country and Europe was the hardest hit as pro- bined share of global FDI projects Singapore top destination city. ject numbers declined 15%, capital increased from 17.7% in 2009 to Since fDi Markets records began investment figures fell by 28% and 20.6% in 2010. in 2003, Asia-Pacific has been the 25% fewer jobs were created as a While the US attracted more top destination region for global result. The Middle East suffered the FDI projects than China, China FDI. The region continued to domi- most in terms of capital investment, attracted more valuable projects. nate in 2010, attracting more than with figures down 45% compared China was the number one country one-third of global FDI projects, cap- with 2009. in the world for capital investment ital investment and jobs. The num- While the number of FDI pro- and job creation with an estimated bers of projects and jobs created in jects into Latin America and the $77bn investment and 305,615 jobs the region remained similar to 2009 Caribbean declined by 4% in 2010, created in 2010. The US was number levels, with capital investment capital investment and job creation two for capital investment and declining 12% to $265bn. However, in the region increased by 8% in number three for job creation, this decline was lower than the 2010, with announced capital behind India. overall global decline in capital investment reaching an estimated investment of 16%. $111.99bn. Big five still dominant It was the only region The top five destination countries Rest of Europe growing fast to record an increase in capital (US, China, UK, India and Germany) Despite an overall decline globally, investment and job creation in together attracted 36% of all global the ‘Rest of Europe’ region and 2010, as foreign companies became FDI in 2010. The UK and Germany North America were the fastest more confident about the area’s eco- held onto spots in the top five8 April/may 2011
  10. 10. fdi trends DEStinationS For the SeconD year runnIng, SIngapore SurpaSSeD all other major cItIeSStill soaring: Singapore is the world’s leading FDI destination city, a position it has held for two years GloBal FDi By DEStination woRlD REGion, 2010despite a 39% and 11% decline in DEStination PRojECt % Ch CaPEx % Ch joB % Ch REGion nUmBERS on ’09 ($Bn) on ’09 CREation on ’09inward FDI projects, respectively. Asia-Pacific 3984 1% 265.42 -12% 884,728 0% For the second year running, western europe 2514 -15% 87.58 -28% 172,407 -25%Singapore surpassed other majorcities, such as Shanghai, London, rest of europe 1662 23% 88.94 -15% 344,234 -3%Dubai and Hong Kong, to rank as north America 1574 19% 67.40 -20% 143,964 10%the top destination city for FDI pro- latam & caribbean 1055 -4% 111.99 8% 282,007 -2%jects in 2010. The city attracted 300 middle east 675 -8% 44.21 -45% 76,795 -19%projects in 2010, an increase of 8% Africa 583 -11% 83.22 -13% 131,458 -7%over 2009. Capital investment in total 12,047 0% 748.75 -16% 2,035,593 -4%Singapore was also up 55%, note: excludes interstate and retail, includes estimates; source: fdi marketscreating 29% more jobs. In terms of capital investment, GloBal FDi By toP FivE DEStination CoUntRiES, 2010Gladstone in Australia was the topcity in the world due to one major DESt’n PRojECt % Ch DESt’n CaPEx % Ch DESt’n joBS % Ch CoUntRy nUmBERS ’09 CoUntRy ($Bn) ’09 CoUntRy CREatED ’09project in 2010. Malaysian companyPetronas announced the investment Us 1,331 19% china 77.17 -12% china 305,615 -9%of $16bn into the city for a gas pipe- china 1,158 13% Us 54.67 -22% india 181,725 14%line. Shanghai was top recipient for Uk 748 -11% india 42.90 -13% Us 122,882 15%jobs created through FDI with an india 691 0% Brazil 41.13 20% Brazil 120,453 65%estimated 26,238 jobs created in germany 379 -39% Australia 36.38 157% russia 100,351 1%the city in 2010, a decline of one- note: excludes interstate and retail, includes estimates; source: fdi marketsfifth on 2009, indicating companiesare looking at less overheated citiesin China (and elsewhere) for labour- GloBal FDi By toP FivE DEStination CitiES, 2010intensive projects. DESt’n PRojECt % Ch DESt’n CaPEx % Ch DESt’n joBS % Ch Asia-Pacific cities dominated City nUmBERS ’09 City ($Bn) ’09 City CREatED ’09the top global cities in terms of job singapore 300 8% gladstone(Aus) 16.00 3101% shanghai 26,238 -20%creation. Four of the top five cities shanghai 252 10% singapore 12.98 55% singapore 25,179 29%included Shanghai, Singapore, london 241 8% shanghai 8.37 1% tianjin (chi) 24,679 191%Tianjin (China) and Bangalore (India), dubai 180 -20% rio de Janeiro 7.27 600% st Petersb’g 19,281 38%which together attracted 5% of jobs hong kong 177 -24% cienfuegos(cub) 5.80 n/a* Bangalore 19,096 19%created globally by FDI in 2010. ■ note: excludes interstate and retail, includes estimates; * - no capital investment in 2009; source: fdi markets April/may 2011 9
  11. 11. Latin lesson: São Paulo is the leading FDI city in the Latin America and Caribbean region, while Brazil has ousted Mexico in the area’s country rankingsUS maintains lead asBrazil stars in LatamLAst yeAr wAs A gooD yeAr for both US tops global charts California also ranked as the topthe Us AnD CAnADA In fDI terMs, wIth The US has maintained its position destination state in North America as the number one global destination for capital investment, with growthCALIfornIA AnD ontArIo toppIng the country for FDI for the second succes- of 37% in 2010, and second in termsstAte rAnkIngs. MeAnwhILe In LAtIn sive year, extending its lead on China of job creation, although it didAMerICA, brAzIL overtook MexICo As in terms of project numbers experience a decline of 8%. Ontariothe LeADIng fDI CoUntry for the attracted. In 2010, though capital ranked second in terms of capitalfIrst tIMe sInCe 2005 investment fell by 22% to an esti- investment and first for jobs cre- mated $54.7bn, job creation ated, but numbers fell 31% and increased to an estimated 122,882, up 14%, respectively. Together these I n 2010, one-fifth of foreign 15% on 2009, on top of the 19% year- two states attracted 20% of capital investors chose the Americas as on-year increase in project numbers. investment and 14% of jobs created a location for investment. North Canada also performed well in through FDI in North America America’s share of global FDI 2010, with projects numbers in 2010. increased from 11% in 2009 to 13% increasing by 16%, resulting in the in 2010, while Latin America and country climbing from 17th most Florida has best year yet the Caribbean retained their market attractive destination country glob- Florida experienced its best year share of 9% of global FDI. ally for FDI to 13th. FDI projects into for FDI attraction since fDi Markets While North America attracted Canada were more capital and records began in 2003. In 2010, the more projects than Latin America labour intensive than FDI into the number of FDI projects increased and the Caribbean, the average pro- neighbouring US. In 2010, the aver- 67% to 72 projects, with Florida ject size in Latin America and the age project into the US was $41.1m attracting 5% of FDI into North Caribbean was twice the size in capi- and created 92 jobs, while the aver- America. tal investment and three times the age project size in Canada was The state of New York witnessed size in number of jobs created than $62.5m and created 114 jobs. the largest nominal increase, that of North America. attracting 126 projects, up 45%, North America has grown for California and Ontario lead states moving it to third position among the sixth consecutive year as an California and Ontario maintained destination states in North America. FDI location. Figures for 2010 show their positions as the top two desti- The biggest movers in the rank- that the global recession did not nation states in North America for ings include South Carolina, which deter investors from the area as FDI in 2010. California in the US moved from 15th position to 11th, project numbers increased 19% attracted a total of 172 projects, and Tennessee, which climbed from on 2009. North America was the an increase of 7% in 2010, while 22nd to 15th place, as FDI into both only region to experience growth Ontario in Canada attracted 127 states almost doubled. FDI into in project numbers in both 2009 FDI projects, an increase of 21% Texas and Georgia fell 12% and and 2010. compared with 2009. 17%, respectively, in 2010.10 April/May 2011
  12. 12. fDI trenDs AmeriCASNew York and Toronto top city list enced the sharpest decline of 8%. LATAm AND CAriBBeANBoth New York and Toronto, placed California remained the top FDi iNFLOwS 2010first and second, extended their source state for interstate invest-leads as the top destination cities in ments in 2010, with 12% of projects total projects 1055North America in 2010 with figures sourced from there. New York, Ohio Capital investment $112bnup 60% and 14%, respectively. New and Illinois also increased in impor- total jobs sreated 282,007York attracted a total of 101 FDI pro- tance as source states in 2010, with top sector software and Itjects in 2010, which helped the city outward interstate projects growing servicesclimb the global ranks to become by 19%, 49% and 59%, respectively. top investor telefonica andthe seventh most popular destina- Financial services and business general electriction city in 2010, up from 16th place services continued to dominate the source: fDi Marketsin 2009. Houston, San Francisco and type of interstate investments, withMiami claimed third, fourth and business services the top activity, more than doubled in 2010. Thefifth positions in North America accounting for 31% of all invest- country attracted a total of 89 FDIwith project numbers increasing ments. Scottrade was the most projects in 2010 which consisted ofby 40%, 48% and 26% respectively. active American company for inter- an estimated $8.3bn of capital invest- Los Angeles, California; Chicago, state investments, accounting for a ment creating an estimated 12,599Illinois; and Atlanta, Georgia, fell total of 57 in 2010. jobs. Eight per cent of FDI into theout of the top five destination cities Latin America and the Caribbeanin North America in 2010, with pro- Latam attraction region was located in Colombia inject numbers down 32%, 23% and The Latin America and the 2010, up from 4% in 2009.28%, respectively. Caribbean region attracted 9% of Mexico ranked second in the global FDI projects in 2010. A total Latin America and the Caribbeaninterstate investment increase of 1055 FDI projects located in the region in 2010, although projectInterstate investments showed con- region, a decline of 4% on 2009 and numbers, capital investment and jobtinued growth in 2010, with the the first decline since 2005. Despite creation fell by 28%, 44% and 52%,number of interstate projects in the decline in project numbers, cap- respectively. As a result, Mexico didthe US rising 31%. In 2010, 2760 ital investment increased by 8% to not feature in the global top 10 desti-interstate projects in the US were an estimated $112bn, whereas job nations, falling from ninth place inrecorded by fDi Markets, which creation figures fell slightly by 2% 2009 to 15th place in 2010. Chile andinvolved a combined investment of to an estimated 282,007. Peru also experienced a sharp declinean estimated $117bn and the crea- The region attracted among the in FDI in 2010, with project numberstion of an estimated 782,513 jobs. largest projects in the world in 2010. down 46% and 32%, respectively.While FDI into the US is growing, The average capital investment perinterstate investment is still much project was $106m, second only to São Paulo remains top citymore important for capital invest- Africa, and the average job creation São Paulo remained the top destina-ment (more than double the level per project was 267, the largest in tion city in Latin America and theof FDI) and especially job creation the world. Caribbean in 2010 with a quarter of(more than six times the level of FDI). all FDI projects in Brazil locating Texas overtook California to Brazil overtakes mexico there. The city attracted 85 projects,become the top destination state For the first time since 2005, Brazil up 23%, with capital investment upfor interstate investments in 2010. overtook Mexico to rank as the top 189% and job creation figures up 7%Interstate projects into Texas destination country for FDI into the on the previous year.increased 33%, with 227 projects Latin America and the Caribbean Bogotá in Colombia climbedlocating in the state in 2010. region. While the number of FDI from seventh position in 2009 toOther states that witnessed a projects increased by 29% in Brazil second in Latin America and thesignificant increase include in 2010, Mexico experienced a 28% Caribbean in 2010. FDI projects intoTennessee (71%), Kentucky (54%) and decrease. Brazil attracted 32% of the city increased 82%. MontevideoPennsylvania (51%). Of the top desti- FDI into the region in 2010, with 337 in Uruguay followed a similar trend,nation states, North Carolina experi- FDI projects involving a combined climbing from 17th to 10th position capital investment of an estimated as FDI into the city doubled. $41.2bn creating an estimated Mexico City experienced theNOrTh AmeriCA 120,450 jobs. On a global level, largest nominal decline in theFDi iNFLOwS 2010 Brazil entered the top 10 destination region with 44% fewer projects in countries in the world, moving from 2010 compared with 2009. FDI intototal projects 1574 11th position to seventh place in Santiago in Chile also declined withCapital investment $67.4bn 2010 in terms of number of FDI pro- figures halving, resulting in a droptotal jobs created 143,964 jects attracted. Brazil ranked fourth from third to seventh in 2010. Atop sector software and It globally in terms of capital invest- sharp fall in FDI from the troubled services ment and job creation. economies of Spain and the US wastop investor toyota Colombia also witnessed success a key cause of the decline of FDI insource: fDi Markets in FDI attraction as project numbers both Mexico and Chile. April/May 2011 11
  13. 13. fDI trenDsAmeriCAS Growth CompariSonS: StateS in north ameriCa (%), 2009-10 WASHINGTON COLORADO GEORGIA TEXAS NEW YORK NORTH CAROLINA FLORIDA ALABAMA KENTUCKY -1 -0.5 0 0.5 1 1.5 2 Note: Excludes interstate, excludes retail, includes estimates Source: fDi Markets, fDi Intelligence On the ascent: California is North Growth CompariSonS: America’s leading state for FDI CitieS in north ameriCa (%), 2009-10 DENVERTOP Five DeSTiNATiON STATeS iN NOrTh AmeriCA, LA2010 ATLANTADeST’N PrOjeCT % Ch DeST’N CAPex % Ch DeST’N jOBS % ChSTATeS NUmBerS ’09 STATeS ($BN) ’09 STATeS CreATeD ’09 CHICAGOCalifornia 172 7% California 6.89 37% ontario 11,210 -14% MIAMIontario 127 21% ontario 6.31 -31% California 9050 -8% HOUSTONnew york 126 45% texas 6.25 -52% nth Carolina 7772 54% SANtexas 92 -12% tennessee 2.91 45% texas 6944 -34% FRANCISCOflorida 72 67% newf’dland 2.80 1806% tennessee 6750 82% NEW YORKnote: excludes interstate and retail, includes estimates; source: fDi Markets -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 Note: Excludes interstate, excludes retail, includes estimates Source: fDi Markets, fDi IntelligenceTOP Five DeSTiNATiON CiTieS iN NOrTh AmeriCA,2010 Growth CompariSonS: CoUntrieS in LatinDeST’N PrOjeCT % Ch DeST’N CAPex % Ch DeST’N jOBS % Ch ameriCa & CariBBeanCiTY NUmBerS ’09 CiTY ($BN) ’09 CiTY CreATeD ’09 (%), 2009-10new york 101 60% Austin 3.61 593% Las vegas 3222 214% CHILEtoronto 49 14% blythe 3.51 n/a* smyrna 3000 89%houston 35 40% smyrna 1.70 223% plaquemine 2832 n/a* COSTA RICAsan francisco 31 48% Lake Mary 1.57 n/a* Mobile 2662 4654% PERUMiami 24 26% newport bch 1.21 n/a* new york 2400 15% MEXICOnote: excludes interstate and retail, includes estimates; * - no capital investment in 2009; source: fDi Markets BRAZIL COLOMBIATOP Five DeSTiNATiON COUNTrieS iN LATiN PUERTO RICOAmeriCA AND The CAriBBeAN, 2010 URUGUAYDeST’N PrOjeCT % Ch DeST’N CAPex % Ch DeST’N jOBS % ChCOUNTrY NUmBerS ’09 COUNTrY ($BN) ’09 COUNTrY CreATeD ’09 -1 -0.5 0 0.5 1 1.5 2 Note: Excludes retail, includes estimatesbrazil 337 29% brazil 41.15 20% brazil 120,450 65% Source: fDi Markets, fDi IntelligenceMexico 212 -28% Mexico 12.87 -44% Mexico 50,593 -52%Argentina 93 -1% peru 10.96 -14% peru 21,685 60% Growth CompariSonS: CitieS in Latin ameriCaColombia 89 107% Colombia 8.32 346% Argentina 19,887 22% & CariBBean (%), 2009-10Chile 55 -46% Chile 7.99 -28% Colombia 12,599 23%note: excludes interstate and retail, includes estimates; source: fDi Markets SANTIAGO MEXICO CITYTOP Five DeSTiNATiON CiTieS iN LATiN AmeriCA LIMAAND The CAriBBeAN, 2010 RIO DE JANEIRODeST’N PrOjeCT % Ch DeST’N CAPex % Ch DeST’N jOBS % Ch SAO PAULOCiTY NUmBerS ’09 CiTY ($BN) ’09 CiTY CreATeD ’09são paulo 85 23% rio de Janeiro 7.27 600% Manaus 7385 2605% BOGOTÁbogotá 31 82% Cienfuegos 5.80 n/a* são paulo 5843 7% MONTEVIDEOMexico City 30 -44% Lurin 3.00 n/a* rio de Janeiro 4503 41% MANAUSbuenos Aires 28 -13% são paulo 2.73 189% paulinia 3877 n/a* -1 0 1 2 3 4rio de Janeiro 23 -23% suape 1.78 10352% Mexico City 3865 -43% Note: Excludes retail, includes estimatesnote: excludes interstate and retail, includes estimates; * - no capital investment in 2009; source: fDi Markets Source: fDi Markets, fDi Intelligence12 April/May 2011
  14. 14. China (above) remains the top FDI destination in Asia-Pacific, with financial services its top sector, while India remains in second place, thanks in no small part to the performance of Bangalore (top left), and Australia (bottom left) also performed wellBig two continue todominate Asia-PacificAsiA-PAcifics rise uP the fDi The total capital invested in AsIA-PACIFICrAnkings shows no sign of the Asia-Pacific region fell by 12%, FDI InFlows 2010slowing, Driven by the behemoth which was primarily due to compa- nies investing less capital in con- total projects 3984economies of chinA AnD inDiA. struction and extraction operations.however, when it comes to capital investment $265.4bn Jobs created by FDI in Asia-Pacific total jobs created 884,728growth it is AustrAliA thAt wAs remained stable in 2010, falling by top sector business servicesthe region’s stAr Performer in 2010 just 0.38%. FDI in manufacturing top investor citigroup accounted for 64% of jobs in the A source: fDi markets sia-Pacific is established in region in 2010. the top tier of world destina- tions for FDI, and in 2010 China still top destination the region consolidated this posi- China extended its lead as the top tion with one-third of global FDI destination country for FDI in projects locating within its borders. Asia-Pacific in 2010. The country Following a 19% decline in projects attracted 29% of all FDI into the in 2009, a 1% increase in FDI pro- region with the number of FDI pro- jects was recorded in 2010 with jects in China up 13% in 2010. China 3984 projects locating in the region. also ranked as the top destination These projects accounted for an esti- country in terms of capital invest- mated $265.4bn capital investment ment and job creation, with an esti- (35% of global investment) and cre- mated $77bn of investment and ated an estimated 884,728 jobs (43% more than 300,000 estimated new of global jobs). jobs created within the country. April/may 2011 13
  15. 15. fDi trenDsAsIA-PACIFIC The top sectors for FDI into China in Markets recorded a total of 300 Growth ComPArisons: 2010 were financial services, indus- projects into the city in 2010, CoUntriEs in AsiA-PACiFiC trial machinery, equipment and representing an increase of 8% on (%), 2009-10 tools, and software and IT. 2009’s figures. Not only did the city PAKISTAN India is in second place for FDI perform better in regards to project AZERBAIJAN within Asia-Pacific, despite a slight numbers, but capital investment VIETNAM 0.3% decline in projects in 2010. figures were also up 55%, creating Capital investment in India fell by 29% more jobs. HONG KONG 13% but 14% more jobs were created, Shanghai overtook Hong Kong THAILAND PHILIPPINES with companies starting to set up to rank as the second best perform- large job-creating operations in ing Asia-Pacific city for FDI projects, CHINA India again. with a 10% increase recorded MALAYSIA in 2010. AUSTRALIA Australia’s fair advance Sydney and Melbourne benefited BANGLADESH Australia emerged as one of the from the overall growth of FDI into -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 fastest growing countries globally Australia in 2010, with project num- Note: Excludes retail, includes estimates for FDI in 2010. It achieved a 40% bers into these cities up 20% and Source: fDi Markets, fDi Intelligence increase in FDI projects in 2010, 81%, respectively. As a result, Sydney which resulted in the country remained the sixth leading city in Growth ComPArisons: climbing from seventh place to the Asia-Pacific and Melbourne CitiEs in AsiA-PACiFiC (%), become joint third leading destina- increased its ranking from 20th 2009-10 tion country in Asia-Pacific, along place in 2009 to ninth place in 2010. with Singapore. Australia attracted The city of Pune in India also SAMUT PRAKAN HO CHI MINH 8% of all FDI projects into Asia- performed well in 2010, attracting CHONBURI Pacific in 2010, up from 5% in 2009. 52% more FDI projects than in 2009. HA NOI The leading sectors for investment HONG KONG into Australia included software Intra-investment SINGAPORE and IT, and the business services Almost one-third of projects locat- SHANGHAI sector, which combined accounted ing in Asia-Pacific in 2010 were GUANGZHOU for 39% of FDI projects in the coun- investments made by companies JAKARTA try in 2010. headquartered in the region. FDI MELBOURNE Vietnam, Hong Kong and from North America was the next KUNSHAN Thailand were less attractive for major source, accounting for 20% -1 -0.5 0 0.5 1 1.5 2 2.5 FDI in 2010, with project numbers of FDI into Asia-Pacific in 2010, and Note: Excludes retail, includes estimates falling by 36%, 24% and 22%, increasing by 9% in 2010. Companies Source: fDi Markets, fDi Intelligence respectively. headquartered in London and New York were the most active investors, singapore: top FDI city accounting for 11% of FDI projects Singapore has maintained its in the region, with HSBC and IBM position as the top destination alone accounting for 8% of all pro- city in the Asia-Pacific region. fDi jects in Asia-Pacific in 2010. ■toP FIve DestInAtIon CountrIes In AsIA-PACIFIC,2010Dest’n ProjeCt % Ch Dest’n CAPex % Ch Dest’n jobs % ChCountry numbers ’09 Country ($bn) ’09 Country CreAteD ’09china 1158 13% china 77.16 -12% china 305,605 -9%india 691 0% india 43.37 -12% india 181,725 14%singapore 300 8% Australia 36.38 157% vietnam 67,191 -17%Australia 300 40% vietnam 29.08 -31% thailand 56,385 39%thailand 204 -22% singapore 12.98 55% malaysia 46,456 51%note: excludes interstate and retail, includes estimates; source: fDi marketstoP FIve DestInAtIon CItIes In AsIA-PACIFIC,2010Dest’n ProjeCt % Ch Dest’n CAPex % Ch Dest’n jobs % ChCIty numbers ’09 CIty ($bn) ’09 CIty CreAteD ’09singapore 300 8% gladstone 16.00 3101% shanghai 26,239 -20%shanghai 252 10% singapore 12.98 55% singapore 25,179 29%hong kong 177 -24% shanghai 8.36 1% tianjin 24,679 191%beijing 131 0% tianjin 5.14 252% bangalore 19,096 19%bangalore 93 16% guangzhou 4.47 -34% chennai 16,150 20%note: excludes interstate and retail, includes estimates; source: fDi markets14 April/may 2011