European logistics FDI struggles to maintain 2016 resurgence

Logistics, distribution and transportation investment into Europe increased in 2016, following a decline between 2013 and 2015. Data from greenfield investment monitor fDi Markets shows investment in Europe in logistics, distribution and transportation activities to serve customers operating across transportation, warehousing and storage increased in 2016 following a previous three-year decline. 

In Europe, there were 185 investments recorded in 2013, which decreased slightly to 183 in 2014 and declined further to 156 in 2015. The number of jobs created in the region also declined from 17,428 in 2013 to 16,987 in 2014, before increasing slightly to 17,269 in 2015. 

In contrast, capital expenditure increased from $8.93bn in 2013 to $9.3bn in 2014, and then declined by 10% to $8.37bn in 2015. 

In 2016, however, the region experienced a 19.23% increase in investment from the previous year – the highest level recorded since 2006. Capital expenditure into Europe also increased significantly from $8.37bn to $9.47bn, as did the number of jobs created, which rose by more than 27%.

The primary destination market for logistics, distribution and transportation investment in Europe between January 2013 and December 2016 was the UK, which attracted 147 projects, followed by Germany with 89 investments and Spain with 75. Of 530 investments that made up the top 10 investment destinations, only 16.8% went into emerging Europe (Poland, Romania and the Czech Republic), while the remaining FDI was dispersed across seven western European countries. 

The key source markets for FDI into Europe between 2013 and 2016 were Germany, the US and France, which together accounted for more than 47% of all investment into the region. Of these three leading source countries more than half of companies gave infrastructure and logistics as a primary motive for investment, followed by domestic market growth potential, cited by 40% of investors, and proximity to markets and customers, cited by one-third. 

Despite the upturn in investment in 2016, data for the first half of 2017 demonstrates the region has already experienced a decrease of 31% in the number of projects recorded compared with the same period in 2016. The number of jobs created and capital expenditure into Europe have also seen a decline of 57% and 61%, respectively.