Poland shoots up Investment Index
Poland shot up seven places in the Foreign Direct Investment Confidence Index compiled by AT Kearney, and now ranks fifth in the world behind only China, India, USA and the U.K.
This indicates that Poland can expect to see continuing increases in the investment it attracts, even as the battle to win FDI among emerging markets intensifies.
And the formula for property investors is a simple one -
FDI equals jobs and jobs equal more people with access to finance and that means greater demand for better standard properties.
This is what is driving the creation of the CEE's aspiring middle classes - the most dynamic sector of the residential property market.
To compile the index over the past seven years, AT Kearney has quizzed CEOs, CFOs and other key decision makers of the world's biggest 1,000 firms about their views and their investment intentions on the 68 countries that receive around 90% of all global FDI. The companies themselves represent around 70% of global FDI flows and generate more than $27 trillion in yearly revenue. These companies represent all major regions and sectors.
Old and new Europe
The survey highlights the wide gulf in appeal between the emerging markets of new Europe, in particular the new EU members and aspirant EU member states, and the more developed economies of Western Europe.
Only the UK, in fourth place (unchanged) in the index, and Germany in ninth place (down from fifth place), make it into the top ten. Not since 1999 have so few Western European countries been in the top 10 FDI locations.
France moved from 6th to 14th, Italy went from 9th to 19th, and Spain dropped from 13th to 17th place. Manufacturing investors reported the strongest decline in preference for Western Europe and are looking instead to China, India, Brazil, Russia, Poland and Mexico.
By contrast, the report states: 'In 2005, China, India and Eastern European countries reached new heights of attractiveness as destinations for FDI as they competed for higher value-added investments, including R&D. '
Besides Poland's rise up the rankings, other notable placings were Russia (6th), Hungary (11th), the Czech Republic (12th), Turkey (13th) and Romania (25th) - all of whom rose strongly in the rankings.
Communications looks set to be key sector
And the most bullish investors in Central and Eastern Europe are those in the communications industry, ranking Poland 1st, Hungary 2nd, the Baltic States 4th, the Czech Republic 5th, Slovakia 7th, Turkey 9th and Croatia 15th.
Confidence among telecommunications investors has been boosted by liberalisation of the industry in many of these countries as well as deregulation, low penetration of mobile phones - and growing spending power among the populations of the CEE states.
In this category, Poland ranked first in the world. This signals big growth to come in this sector.
Poland for off-shoring
The report also highlights Poland's growing appeal as a location for business process off-shoring (BPO). This usually translates into service or call centres.
Poland also holds second place as the most preferred location for investments in the electric and gas sectors, and the third place in agricultural, forestry and fishing.
CEE countries also score well among investors seeking research and development locations (R&D), mainly because they offer a combination of strong scientific and engineering skills along with low labour and operating costs.
33% of investors have plans to invest in CEE countries within the next three years
Nearly one-third of global investors are planning R&D-related investments in central and eastern Europe over the next three years.
US investors ranked Poland seventh most attractive FDI location, while European managers placed it third.
FDI into Poland was $7.724 billion in 2005.
Poland's exclusive position
By moving into fourth place on the list, Poland enters an exclusive FDI country club - the first five most popular FDI recipient countries receive a full 35% of all global FDI.
The report concludes that 'Developing countries in Asia and Eastern Europe will attract more R&D investment relative to other regions of the world. The combination of lower cost and increasingly higher quality labor, more reliable property right regimes, and educational and IT infrastructures is helping to galvanize investor interest in these markets.'
Great news then for property investors looking at new Europe, in which we include the UK, not so great for investment in old Europe, other than in selected areas and sectors.
(Source: http://www.propertysecrets.net)