Concern about future FDI as multinational site visits plummet
IDA Ireland admits that virtual visits cannot compensate for face-to-face meetings
In-person site visits have been on hold since March due to the Covid crisis
The number of site visits made by multinationals looking to set up or expand in the Republic has plunged due to the Covid crisis, with virtual tours failing to make up the difference.
New figures show 232 foreign direct investment (FDI)-related site visits have taken place in the first nine months of 2020, consisting of 131 in-person visits and 101 virtual ones. This compares to 700 site visits in 2019 and more than 600 per annum for the three preceding years before that.
Responding to a parliamentary question on site visit numbers from Sinn Féin TD Pa Daly earlier this week, the Tánaiste and Minister for Enterprise Leo Varadkar stressed that while they can be useful in encouraging investment decisions they do not necessarily reflect activity.
This is in part because a significant percentage of new FDI comes from existing IDA client companies who don’t necessary need or want to visit sites, Mr Varadkar said.
According to IDA Ireland, FDI investments into the Republic were down just 6 per cent for the first six months of the year. Nonetheless, given how long investment decisions take, there is concern about future FDI flows to the State.
IDA Ireland has held no physical site visits since Covid restrictions were introduced in March and has instead focused on hosting virtual tours of potential developments.
As in previous years, the majority of FDI-related visits held this year have been sites in Dublin. It accounted for 86 visits in the first nine months, with Cork and Limerick responsible for 22 and 18 visits respectively.
“Live, in-person itineraries continue to be restricted but will resume when travel restrictions and social distancing requirements are lifted,” an IDA spokeswoman said.
“IDA staff are in constant contact with existing and target clients including through the use of e-site visits to generate new business. It cannot however, replicate the level and depth of engagement and development of meaningful business relationships, trust and confidence that comes about through face-to-face meetings,” she added.
The Covid crisis has not only put site visits on hold but has also led to FDI investment decisions being delayed or postponed both here and overseas. Global FDI flows fell 49 per cent in the first half of 2020, according to the UN’s trade body, UNCTAD. FDI reached an estimated $98 billion (€83.5 billion) in the six-month period under review, a decline of 75 per cent compared to 2019.
A report from EY published earlier this week suggests the Republic remains one of the most popular destinations for investment in Europe. However, IDA Ireland that given the Covid crisis, FDI could be down by as much as 40 per cent locally this year.