The Republic of Ireland has fallen one place to 20th in a ranking of the top countries as locations for foreign direct investment (FDI) with Brexit uncertainty blamed for the decline.
The study, by global managing consultancy AT Kearney, noted that the State's overall score had increased marginally versus the prior year, which it said indicated robust optimism. However, it added that concerns over the impact of Britain's departure from the European Union, was having an impact.
“On the one hand, Ireland’s significant trade relationship with the United Kingdom makes it the economy most vulnerable to Brexit. On the other hand, some of the potential trade losses may be at least partially offset by Ireland’s strong substitutability with a post-Brexit UK as an investment destination,” the report authors’ said.
The report noted that while the Republic received several high-profile M&A’s last year, overall FDI inflows plummeted due to the impact of US corporate tax cuts in late 2017.
However, it also stressed that the country ‘has long been among the most competitive markets globally for FDI attractiveness,’ and pinpointed our highly educated workforce as one of the State’s key advantages in securing investment.
The authors said a plan to establish the Republic as the European leader in Stem in Europe by 2026 “will be a key labour force differentiator in the 21st century digital economy and has likely helped Ireland to become the top FDI destination for US technology companies.”
According to the AT Kearney latest FDI confidence index, more than 75 per cent of investors say that foreign direct investment is more important now that it has been in recent years. In addition, almost four-fifths say their companies will increase their level of FDI in the next three years.
The US tops the index rankings for the seventh year in a row, followed by Germany, which overtook Canada for second spot. The UK retained fourth spot for the third year in a row, while Russia moved up two places to fifth place.
The top 10 countries on the Index remain unchanged from last year with the exception of Singapore, which displaced Switzerland to rank 10th overall.
