France keeps the head out of the water. It retains its most attractive country in Europe in 2024 for companies, with the largest number of international investments made, according to the annual EY barometer.
Therefore, France is number one with 1,025 projects welcome in 2024, but this result has dropped 14% compared to 2023. The United Kingdom (second with 853 projects) and Germany (third with 608 projects) follow the same downward trend compared to last year.
However, the French performance is attenuated by its third row in number of works per project: 30 for France against 48 for Germany and 125 for Spain. The creations of publications generated in France by these foreign investment projects have decreased sharply (-27%) between 2023 and 2024, “which is indicative of prudence, costs and deadlines related to locations,” according to the barometer.
The creation of jobs in France still faces the cost of the workforce, which is among the highest in Europe as shown in the table below.
The second inconvenience for France, foreign investors proceed mainly due to the extension of the sites that already exist for ex-nihilo creation, and this much more than in other parts of Europe (63% against 36% on average).
“Europe can’t reassure”
Beyond the French action, all of Europe wins. Foreign investments have decreased for the second consecutive year and are now at their lowest level for nine years (-5% between 2024 and 2023).
The contrast with the United States is surprising because at the same time, it has increased around 20% throughout the Atlantic.
American investors also become less and less to Europe (-11 % compared to 2023 and -24 % compared to 2022). “Europe cannot reassure investors about their ability to overcome crises and offer new solutions,” says EY’s report.
Business leaders questioned by EY cite in particular geopolitical tensions, macroeconomic context and commercial barriers. Beyond these crises, echoing the recent Draghi report, international leaders invite Europe to respond to the structural problems it faces: competitiveness deficit, less ability to innovate compared to the United States and China, scarcity of qualified labor and trained in the challenges of tomorrow.
The employment number created by foreign investments also decreased by 15% in 2024 compared to 2023.
The suffering industry in France
In the midst of the European fall, France remains in front of its neighbors. It is distinguished in certain strategic sectors (energy, AI, agriculture). In general, the balance between the openings and sites of the sites remains positive, but decreases and the destruction of the works is at high levels.
France is particularly difficult in industry services and added value. “In the eyes of foreign investors, the industrial appeal suffers from salary costs, but also due to lack of land, energy competitiveness, robotization, innovation and agility,” the report details.
Certain historical industries, such as chemistry and car, mark the fall, and know more closes than factory openings for the first time from the Covid crisis.
According to the survey conducted by EY, business leaders recognize the strengths of France (market size, innovation, skills, infrastructure) but have faced short -term challenges (profitability, stability, energy and means available for ecological transition).
The situation is even more worrying since France’s bouncing capabilities are fragile, especially due to the growth of degraded moles and finances.
World Champions
However, EY’s study raises several positive points: “Despite its size, after all limited, France has been able to understand the ball in the jump in the sectors of the future: AI, Decarbon Energy, Software, Defense …”
In addition, the French economy has world champions in a certain number of areas (energy, aeronautics, agrifood, defense …) that offer certain guarantees in terms of sovereignty.
Finally, at European level, the total absence of an industry in certain areas (semiconductors, large digital platforms …) also raises the issue of autonomy.
Source: BFM TV
