Five forces shaping foreign direct investment in Europe

EY

EY’s 2026 Europe Attractiveness Survey finds that, despite a 7% fall in foreign direct investment projects in 2025, Europe remains resilient as an investment destination. More than 5,000 projects were announced, creating over 200,000 jobs, while investor confidence in Europe’s long-term prospects remains positive.

Key highlights include:
• FDI projects fell 7% across Europe in 2025, reflecting global uncertainty, weaker growth and geopolitical pressures.
• 5,026 projects were announced across Europe, supporting more than 200,000 jobs.
• 60% of businesses expect Europe’s attractiveness to improve over the next three years.
• Investment is shifting towards AI, defence and low-carbon energy, while traditional industrial sectors face greater pressure.

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