Brexit bounce for Dublin but London holds pole position for FDI
IRELAND is benefiting from a Brexit bounce when it comes to attracting foreign direct investment (FDI) for financial services products, according to global consulting firm EY.
Last year the country attracted a total of 28 FDI financial services projects, up from 12 in 2016.
This works out at an increase of 133pc year-on-year. Unsurprisingly, the financial FDI projects in Ireland were heavily weighted towards Dublin, with the capital city recording 25 out of the 28.
"The results of this research are in line with what we have seen previously and with what our clients are telling us," said Neil Gibson, chief economist at EY Ireland, speaking following the publication of EY's latest 'UK Attractiveness Survey'.
"Ireland, in particular Dublin, is performing well in attracting FDI investment as Brexit looms on the horizon," Mr Gibson said.
However he warned on the importance of Ireland avoiding pricing itself out of the market as property prices continue to rise across the country. "There will certainly be significant financial services investment in the near future but Ireland will continue to face stiff competition given the positive impact well-paid jobs in this sector have on the economy," he added.
The UK remains the overall number one destination in Europe, despite Brexit and related disputes convulsing British Prime Minister Theresa May's Cabinet.
While London remains in the lead when it comes to attracting the highest level of inward investment for financial services, its lead over other European cities is starting to close, as businesses ensure they have the required registered and regulated operations in the European Union to do business after Brexit.
Last year London recorded 47 financial services projects, down from the 73 projects recorded in 2016.
In comparison, Paris attracted 26 financial services projects in 2017, up from 17 in 2016, while Frankfurt attracted 25, up from the 12 it reported in 2016. Overall, the UK saw the number of all FDI projects it secured in 2017 increase by 6pc from the previous year, retaining its position as Europe's leading country for FDI, despite a 31pc surge in projects in France.
While the UK retains its number one position, the EY report suggest that there has been a decline in foreign investor sentiment in the UK.
The EY survey is based on the views of representative panels of international and local opinion leaders and decision-makers.
There has been some recovery in perceptions of the attractiveness of the UK since investor sentiment weakened immediately after the Brexit vote.
However current perceptions on a range of attributes examined in the report are still "significantly lower" than the pre-referendum.
Unsurprisingly, access to the EU market, as well as domestic growth, feature as issues of concern for investors.
What is perhaps more surprising is that there is a fall in perceptions of stability in the social climate, quality of life, diversity and the political environment in the UK.
These factors, taken together, show how the UK's image has declined dramatically, according to the report.
"The UK is an economy in transition, as the move toward Brexit and the accelerating digital revolution reshape the landscape, and urgent action is required to position the UK for future success," the report found.