Foreign direct investment (FDI) into Ireland fell by €24 billion last year largely as the result of a big slump of flows from Europe, new figures show.
According to data from the Central Statistics Office (CSO), investment from the United States rose by €73 billion with an additional €42 billion boost from Bermuda and a €19 billion gain from Asia compared with the prior year.
However, this was offset by a €155 billion drop in investment from Europe, led by a €96 billion decline in flows from the Netherlands and a €59 billion decline from Luxembourg. There was also a €17 billion drop-off in investment from Britain, the latest figures show.
The stock of direct investment in the Republic fell from €882 billion to €874 billion last year on the back of decreases in stock held by the Netherlands, Luxembourg, Britain and Switzerland. This was partly offset by a €94 billion increase in investment stock held by the US.
Reinvested earnings inflows of €57 billion were offset by decreases in equity and other capital investment of €48 billion and €32 billion, respectively.
Irish stocks of direct investment abroad increased marginally to €824 billion at the end of 2018 from a stock position of €823 billion at the end of 2017.
Direct investment abroad increased by €600 million in 2018 – from a decrease in outflows of €1.8 billion a year earlier.
The CSO said reinvested earnings and other capital investments abroad of €13.3 billion and €9.1 billion were offset by a decrease in equity abroad of €21.8 billion. The decrease in equity investment was mainly from Europe, down €29 billion.
Concern
Commenting on the figures, Joanna Murphy, chief executive of Taxback. com, said that while the role of FDI remained important for Ireland, accounting as it does for one in seven employees – the drop in investment figures for the second year running was a concern.
“We need to take a fresh look at our strategy around FDI. Rather than rest on our laurels under the presumption that what we are currently doing is working, we must now look at our approach to FDIs through a different lens,” she said.
“We absolutely need to continue to attract and retain overseas investment, but we are over-reliant on the bigger players – when they leave Ireland to locate elsewhere, it really hurts – as evidenced by Novartis’s recent announcement on 320 job losses in Cork. We cannot afford to allow ourselves, and our economy, to be so overly exposed and as a result so heavily impacted by these overseas employers,” Ms Murphy added.
