Poland Still Drawing Investors
July 4, 2014
Foreign investors continue to regard Poland as the most attractive destination for new projects in Central and Eastern Europe, according to the 2014 European Attractiveness survey by consulting firm EY.
In this year’s survey, 31 percent of decision makers from multinational companies surveyed by EY listed Poland as the most attractive destination for foreign direct investment in the region. Poland scored 20 percentage points more than the runner-up, the Czech Republic, which was mentioned by 11 percent of respondents. Romania was third, and Hungary, Ukraine and Turkey were further down the list.
In addition, Poland defended its third place in Europe in terms of the number of jobs created through foreign direct investment last year, according to EY data.
Jacek Kędzior, managing partner at EY in Poland, said, “Poland has for years been attracting investors with its economic and political stability, the size of its domestic market and geographical location. This year we also noticed that Poland is the clear leader in the region in terms of research and development (R&D) projects, mainly due to investment in the information technology (IT) sector. This means that investors have come to appreciate our highly educated staff. Once again, it is clear that these high ratings for Poland bring us definitely closer to the level of confidence that investors have in Western European countries.”
In Western Europe, Germany leads the way, listed as the most attractive destination by 40 percent of investors from around the world. Respondents also highly rated Britain (22 percent) and France (11 percent).
According to the survey, in 2013 Poland attracted 107 new investment projects, ranking 10th in Europe in this respect. In terms of new job creation, Poland remained in third place in Europe, behind Britain and France. In total, 13,862 new jobs were created in Poland in 2013 thanks to foreign direct investment, 6 percent more than a year earlier. Notably, at a time when investors were undertaking labor-intensive projects in Poland, the number of new jobs created in Europe as a whole due to foreign direct investment fell by 2 percent, EY said.
Sławomir Majman, head of the Polish Information and Foreign Investment Agency (PAIiIZ), said, “Poland once again outdistanced the competition in Central and Eastern Europe. We are particularly happy with our high position when it comes to the creation of new jobs.”
Last year, Poland was the runner-up in Europe, after Serbia, in terms of the largest number of jobs created per project. Each foreign direct investment project in Poland created 130 jobs on average. This is the best result in the European Union and the second best in Europe, after Serbia, where each project created over 190 jobs on average. In total, more than half the investment projects were in industry, mainly in the automotive and plastics sectors.
Ilona Antoniszyn-Klik, Undersecretary of State at the Ministry of the Economy, said, “Foreign investment creates quality jobs. It also of fundamental importance for small and medium-sized enterprises acting as suppliers for foreign investors.”
Experts agree that what the European Union needs most today is jobs. Paweł Tynel, a director at EY, said, “Unemployment, especially among young people, is the biggest problem in the EU, so we should be happy that Poland is attracting projects that generate a significant number of jobs. However, the overall decrease in the number of projects calls for reflection and should encourage politicians to rethink how they motivate investors to come to Poland instead of Germany or Britain. I’m referring not only to incentives for investors, although the decision to extend the life span of Poland’s special economic zones was certainly a very good decision. We will also have funds from the new EU budget at our disposal.”
In 2013, Europe attracted the largest number of new foreign investment projects in the 12 years of the European Attractiveness survey. Although Europe only started to enter a path of growth last year, the number of new projects totaled 3,955 and marked a rise of 4 percent over 2012. FDI was a quarter higher than in 2012, at 223 billion euros. On the other hand, the number of new jobs created by foreign investors shrank for the first time in four years. By far the biggest beneficiaries of foreign investment are Britain, Germany and France. The United States remains the largest investor in Europe, but the number of projects from the BRIC countries—Brazil, Russia, India and China—is also increasing.
A section of the survey on how investors view various regions of the world shows that Western Europe (mentioned by 45 percent of respondents) for the first time in years came ahead of China (44 percent) in the ranking of attractiveness. Western Europe’s ratings grew by 12 percentage points from a low in 2012. North America was in third place, with 31 percent, ahead of Central and Eastern Europe, with 29 percent.