Foreign direct investment has plunged in France and Germany, who both have the euro currency. France (probably needless to say) is the worst hit, with its inward investment alomost HALVED.
The UK, on the other hand, saw its foreign investment TRIPLE in 2004 alone. The UK did even better than the US, where foreign investment doubled in 2004.
Foreign investment in Germany and France plunges
By Christopher Swann in Washington
Published: June 23 2005 23:49 | Last updated: June 23 2005 23:49
Foreign investment in France and Germany fell sharply in 2004, reinforcing concerns that inflexible labour practices and weak domestic demand are driving investors elsewhere.
In France, inward investment almost halved from $43bn (€35.44bn) to $24bn, according to figures released yesterday by the Organisation for Economic Cooperation and Development, the group representing the world’s most industrialised countries.
In Germany, foreign investors actually withdrew $39bn, having invested $27bn in 2003.
Mark Zandi, chief strategist at Economy.com, the consultants group, said the data showed US companies the main source of direct investment funds in 2004 were spending their cash piles mainly on Asian investments.
“US companies are attracted to Asia partly because the currencies remain competitive, but also as low cost bases for production destination and as growing markets in their own right,” he said.
“Europe is almost a mirror image of this, with a more expensive currency, weak domestic demand, high labour costs and, now, political uncertainty.”
the weakness of continental Europe did not affect the UK. Foreign direct inflows into the UK more than trebled to $78.5bn.
The UK is among the world’s most active countries for direct investment, and is both a large recipient of investment and a big investor overseas. The UK is the world's second largest overseas investor after the United States.
US companies almost doubled their overseas spending in 2004, with foreign direct investment outflows jumping to $252bn from $141bn in the previous year.
Wealthy countries overall stepped up investment in developing economies, with overall OECD outflows climbing from $593bn to $668bn in 2004.
China was the largest recipient of direct investment in developing countries, with a record inflow of $55bn up from $47bn in 2003.
Edited by Blackleaf, 24 June 2005 - 08:51 AM.