Foreign Direct Investment in Spain Sees 15% Increase in 2024 Amid European Decline
Spain attracts foreign investors with a growing economy despite a 5% drop in overall European foreign direct investment.
Foreign direct investment (FDI) in Spain grew by 15% in 2024 compared to the previous year, according to an annual analysis by a professional services firm.
This increase resulted in the establishment of 351 projects and the creation of 34,603 jobs within the country.
This growth stands in stark contrast to the overall trend in Europe, where FDI fell by 5% for the second consecutive year, reaching its lowest level in nine years.
The analysis concluded that Spain ranked as the fourth most attractive destination for foreign capital, following France, the United Kingdom, and Germany.
Collectively, these top three countries accounted for half of all new FDI projects in Europe in 2024, although they experienced double-digit declines: France recorded a 14% decrease, the United Kingdom fell by 13%, and Germany saw a drop of 17%.
Foreign direct investment refers to announced projects by foreign companies that lead to the creation or expansion of facilities and job creation in the host country.
Excluded from this category are mergers and acquisitions, joint ventures unless they create new facilities or jobs, licensing agreements, investments in retail, hotels, leisure, public utilities, or natural resource extraction, and investments in pension funds, insurance, replacement investments (such as machinery upgrades), or non-profit organizations.
The report attributed the decline in European investment to several factors, including slow economic growth, persistently high energy prices, geopolitical tensions, the effects of remote working, and reduced outsourcing expenditures.
In total, global companies announced 5,383 new creation and expansion projects across 45 European countries in 2024, down from 5,694 in 2023. This year-on-year decline of 5% adds to a 4% decrease between 2022 and 2023. Current investment levels are now 19% lower than their peak in 2017 and 16% below pre-pandemic levels.
Despite the overall downturn in Europe, 61% of executives surveyed expressed optimism that foreign capital inflow would improve in the next three years, citing positive economic indicators.
Data from 2024 indicated a rising interest in the defense sector and significant investments from European firms expected in renewable energy, semiconductors, pharmaceuticals, and electric vehicles in the coming years.
The study raised concerns that tariffs introduced by the United States would disrupt the global investment landscape, noting that many companies anticipated and accounted for potential strategic changes in advance of impending policies.
Reports indicated that the number of announced projects by U.S. investors in Europe dropped by 11% compared to 2023 and by 24% from 2022. If the survey had been conducted later, the appetite for short-term investment in Europe might have been even lower.
In employment creation associated with FDI, Spain was the second-largest job creator in Europe, with 34,603 positions, although this was 18% fewer than in the prior year.
The United Kingdom led with 38,196 new jobs, followed by France with 29,000 new positions (both representing a 27% reduction compared to 2023).
Turkey created 27,066 jobs (a 29% increase), Germany added 19,208 jobs (a 35% increase), and Poland generated 18,711 jobs (down 16%).
Serbia notably generated 56% more FDI-related jobs in 2024 compared to 2023, totaling 17,344.
The professional services firm explained that Spain's attractiveness to foreign investors stemmed from strong economic performance, low energy and labor costs, and ample land availability.
Additionally, the allocation of €163 billion in Next Generation EU funds, the second largest in the EU, which must be deployed by August 31, 2026, has enhanced the country's investment allure.
On average, each project in Spain created 125 jobs at a total hourly cost of €25.79.
As an example of significant investment, the firm highlighted AstraZeneca's commitment to its hub in Barcelona, where it plans to invest up to €1.3 billion between 2024 and 2027 for the development of vaccines, immunological therapies, and treatments for rare diseases.
The director of EY-Parthenon in Spain emphasized the vital role of foreign investment in both the Spanish and European economies and indicated that the survey's findings suggested a focus on future-oriented sectors that could drive economic growth.
Noting that Spain is well-positioned in emerging sectors such as renewables, he stated there's still room for growth in areas like artificial intelligence and electric mobility.
This increase resulted in the establishment of 351 projects and the creation of 34,603 jobs within the country.
This growth stands in stark contrast to the overall trend in Europe, where FDI fell by 5% for the second consecutive year, reaching its lowest level in nine years.
The analysis concluded that Spain ranked as the fourth most attractive destination for foreign capital, following France, the United Kingdom, and Germany.
Collectively, these top three countries accounted for half of all new FDI projects in Europe in 2024, although they experienced double-digit declines: France recorded a 14% decrease, the United Kingdom fell by 13%, and Germany saw a drop of 17%.
Foreign direct investment refers to announced projects by foreign companies that lead to the creation or expansion of facilities and job creation in the host country.
Excluded from this category are mergers and acquisitions, joint ventures unless they create new facilities or jobs, licensing agreements, investments in retail, hotels, leisure, public utilities, or natural resource extraction, and investments in pension funds, insurance, replacement investments (such as machinery upgrades), or non-profit organizations.
The report attributed the decline in European investment to several factors, including slow economic growth, persistently high energy prices, geopolitical tensions, the effects of remote working, and reduced outsourcing expenditures.
In total, global companies announced 5,383 new creation and expansion projects across 45 European countries in 2024, down from 5,694 in 2023. This year-on-year decline of 5% adds to a 4% decrease between 2022 and 2023. Current investment levels are now 19% lower than their peak in 2017 and 16% below pre-pandemic levels.
Despite the overall downturn in Europe, 61% of executives surveyed expressed optimism that foreign capital inflow would improve in the next three years, citing positive economic indicators.
Data from 2024 indicated a rising interest in the defense sector and significant investments from European firms expected in renewable energy, semiconductors, pharmaceuticals, and electric vehicles in the coming years.
The study raised concerns that tariffs introduced by the United States would disrupt the global investment landscape, noting that many companies anticipated and accounted for potential strategic changes in advance of impending policies.
Reports indicated that the number of announced projects by U.S. investors in Europe dropped by 11% compared to 2023 and by 24% from 2022. If the survey had been conducted later, the appetite for short-term investment in Europe might have been even lower.
In employment creation associated with FDI, Spain was the second-largest job creator in Europe, with 34,603 positions, although this was 18% fewer than in the prior year.
The United Kingdom led with 38,196 new jobs, followed by France with 29,000 new positions (both representing a 27% reduction compared to 2023).
Turkey created 27,066 jobs (a 29% increase), Germany added 19,208 jobs (a 35% increase), and Poland generated 18,711 jobs (down 16%).
Serbia notably generated 56% more FDI-related jobs in 2024 compared to 2023, totaling 17,344.
The professional services firm explained that Spain's attractiveness to foreign investors stemmed from strong economic performance, low energy and labor costs, and ample land availability.
Additionally, the allocation of €163 billion in Next Generation EU funds, the second largest in the EU, which must be deployed by August 31, 2026, has enhanced the country's investment allure.
On average, each project in Spain created 125 jobs at a total hourly cost of €25.79.
As an example of significant investment, the firm highlighted AstraZeneca's commitment to its hub in Barcelona, where it plans to invest up to €1.3 billion between 2024 and 2027 for the development of vaccines, immunological therapies, and treatments for rare diseases.
The director of EY-Parthenon in Spain emphasized the vital role of foreign investment in both the Spanish and European economies and indicated that the survey's findings suggested a focus on future-oriented sectors that could drive economic growth.
Noting that Spain is well-positioned in emerging sectors such as renewables, he stated there's still room for growth in areas like artificial intelligence and electric mobility.
Translation:
Translated by AI
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
