The number of foreign direct investments (FDI) in Europe decreased by 5% year-on-year, reaching the lowest level in 10 years, while the number of jobs created dropped by as much as 16% year-on-year. In Poland, the number of investments increased by 13% year-on-year, but the number of jobs declined (-16% y/y). Nearly all sectors recorded a reduction in FDIs, with the most significant drop in IT services (-17% y/y), marking another year of large declines. The attractiveness of the Old Continent as an investment destination also clearly suffered — for the first time, the United States is perceived as a more attractive place to invest.
According to the annual EY Europe Attractiveness Survey, the number of foreign direct investments on the continent dropped by 5% compared to 2023 (5,383 projects). Jobs generated by FDIs also fell by 16% year-on-year (269,740). This is the second consecutive year of decline in foreign investment in Europe, with a sharper drop than the previous year (-4% y/y in number of FDIs and -7% y/y in jobs created). The number of FDIs in Europe was at its lowest since 2015.
A notable trend is the declining share of U.S. investments in Europe, which fell by 11% this year, while the share of intra-European investments rose to 60%. The level of expansion by companies already present in Europe remained stable, but greenfield projects declined by 20%.
Weak economic growth, persistently high energy prices, and geopolitical tensions are key challenges undermining Europe’s competitiveness to investors. Long-term structural problems, such as erosion of industrial competitiveness compared to the U.S. and China, also matter. Meanwhile, European companies see advantages in nearshoring and shortening supply chains, prompting investment in neighboring countries — this trend may strengthen in the near future, says Jacek Kędzior, Managing Partner at EY Poland.
The volume of foreign investments in Europe is also affected by the dynamics of U.S. investments and the improving attractiveness of the United States, which competes with Europe for capital. The number of projects announced by U.S. investors in Europe dropped by 11% compared to 2023 and by 24% compared to 2022. American investments in Europe are at their lowest level in the past decade, accounting for just 18% of all FDI projects in Europe compared to 24% in 2015. Meanwhile, economic conditions in the U.S. improved until the end of last year, and industrial incentives like the 2022 Inflation Reduction Act increased attractiveness for foreign investments.
As many as 37% of companies deferred, canceled, or reduced investment plans in Europe in 2024. Meanwhile, only 59% of investors declared intent to undertake a new investment in Europe in the coming year (a decline of 13 percentage points). The main reasons for changing investment plans are overall market and trade uncertainty, high energy costs, and regulatory conditions in Europe, says Kędzior.
Poland’s Bitter-Sweet Picture Amid Europe
Europe’s decline is largely caused by an outflow of investors from countries that lead in FDI inflows. France, ranked first, recorded 14% fewer investments in 2024 year-on-year (1,025 projects). Declines are also visible in the UK (-13% y/y, 853), Germany (-17% y/y, 608), and Turkey (-15% y/y, 320). Meanwhile, some countries including Poland stand out. After a 3% drop in investments in 2023, Poland attracted 259 investments last year, 13% more than in 2023. The European leader in growth was Denmark (+86% y/y, 82), followed by Romania (+57% y/y, 94) and Austria (+31% y/y, 105).
Investment attractiveness in Poland looks different when considering jobs generated by planned FDIs. EY data show that the number of jobs from announced FDIs in 2024 was 18,711 — 16% less than in 2023. This contrasts with last year’s report, which showed a 21% increase (22,378 jobs). Declines in job numbers were also recorded in the UK (-27% y/y, 38,196), France (-27% y/y, 29,000), and Spain (-18% y/y, 34,603). The highest increases were in Serbia (+56% y/y, 17,344), Germany (+35% y/y, 19,208), and Turkey (+29% y/y, 27,066).
Poland’s location in Europe leverages its logistics leadership and positive experiences from previous manufacturing investments and SSC/BPO sectors. However, energy prices, rising wages, and proximity to conflict zones affect foreign investor decisions, says Paweł Tynel, Partner at EY Poland.
Industrial Processing and Business Services in the Red
Sectors most responsible for negative results across the continent were industrial processing and business services — both saw a 9% drop in investment volume year-on-year. The drop in processing is particularly severe: for the first time in over 15 years, greenfield investments represent less than one-third of projects (down 20% y/y), with 113,179 jobs generated — 25% fewer than in 2023. Negative results were also seen in sales and marketing investments (-2% y/y) and logistics (-6% y/y). However, investments in R&D (+3% y/y) and headquarters construction (+13% y/y) grew in 2024.
Europe vs. USA — The Old Continent Slowly Losing Appeal
EY’s survey also explored investor sentiment about Europe. Results show that 37% changed their investment plans in Europe in the last 12 months. For the first time since 2021, the share of respondents planning new investments in Europe within the next year declined (59%, down 13 percentage points).
When asked about attractive investment regions, investors for the first time more frequently pointed to the U.S. (55%) than Western Europe (44%). Central and Eastern Europe (41%), Arabian Peninsula countries (24%), and Mainland China (23%) followed.
Changes in tariffs or their rates profoundly reshape global trade realities and investor behavior. Consequently, these affect investment decisions and the attractiveness of Europe and the U.S. Forty-two percent of investment decision-makers believe U.S. economic policies will reduce Europe’s attractiveness, while 27% believe it will increase. Although 62% expect Europe’s attractiveness to grow over the next three years, the figure is even higher for China and the U.S. (67% and 74%, respectively). Reducing energy prices, better SME support, increased investment in growth areas like AI, and lowering trade barriers are currently seen as keys to attracting investment to Europe, Tynel concludes.
About the study:
The EY Europe Attractiveness Survey 2025 consists of two parts. The first is quantitative data collected through the EY European Investment Monitor (EIM), in cooperation with OCO, on foreign investments announced in 45 European countries in 2024, resulting in new jobs and facilities. The study excludes mergers and acquisitions (unless resulting in new facilities or jobs), licensing agreements, retail and leisure facilities, hotels and real estate, public utilities, extractive activities, portfolio investments (pensions, insurance, and financial funds), factory refurbishments, and non-profit organizations. The results are supplemented by a survey conducted by Longitude for EY among 500 global business leaders between January 31 and March 3, 2025.
