Australia retains top-ten ranking in FDI Confidence Index as investors eye Asia-Pacific
Australia has retained its top-ten ranking for the seventh successive year in A.T. Kearney’s Foreign Direct Investment (FDI) Confidence Index. Australia has been ranked 9th in the 2017 edition of the Index, released yesterday.
The Index is a forward-looking analysis of how political, economic, and regulatory changes will likely affect FDI inflows into countries in the coming years. The Index is constructed using primary data from a proprietary survey administered to senior executives of the world’s leading corporations. Respondents include C-level executives and regional business leads. All companies participating in the survey have annual revenues of $500 million or more.
Since its inception in 1998, the study has reliably pointed toward firms’ top choices globally for FDI, with the countries ranked in the Index reliably tracking closely with the destinations for actual global FDI inflows.
In this year’s survey 35 percent of the respondents said they were optimistic about Australia’s economic outlook, compared to 32 percent last year. Investors from Asia are among the most optimistic about Australia and have ranked it as third most attractive investment destination. Globally, investors from the IT sector are the most interested in Australia.
“Relative to the rest of the world Australia has seen unprecedented growth and stability. While there is broad, and healthy, acknowledgement that we need new answers going forward to sustain our economic growth, the fact that international investors remain interested in Australia is a good news story. We need to capitalise on this optimism by embracing FDI to build the future economic story of Australia,” said Nigel Andrade, Partner and Head of Australia at A.T. Kearney.
“Australia’s general security environment and the efficiency of its legal and regulatory processes are strong attractions for foreign investors. The results of this year’s Index show that these two aspects are the top factors that global investors look at when making a decision about their investment destination,” Nigel added.
The Index indicates that investors continue to look at Asia-Pacific as a key driver of growth. Five countries from the region feature in the top-ten rankings this year highlighting the confidence global business leaders have in the region. The other four countries in addition to Australia are:
- China: Ranked 3rd
- Japan: Retains its 6th place
- India: Continues to rise up the rankings coming 8th this year
- Singapore: Secured the 10th spot for a second year running
The United States tops the Index, holding on to its first-place position for the fifth year in a row. Germany jumped two spots to second. The UK and Canada make up the rest of the top 5.
New Zealand was one of three new entries into the 2017 Index. The country, ranked 23rd, broke into the top 25 alongside newcomers South Africa and the United Arab Emirates, who came 21st and 25th respectively. The Ministry of Business Innovation and Employment has been playing a key role in attracting foreign investment to New Zealand. It has been facilitating investments in primary industries such as specialized manufacturing, infrastructure, oil, gas and mining, ICT and digital, and the shared services sector.
“FDI continues to be seen as a channel for growth in an environment of weakening global trade flows and increasing protectionism. We expect a continued upward trend in global FDI flows as 75 percent of respondents in our survey stated they plan to increase their FDI in the coming three years,” said Nigel.