Foreign investments in France hit 10-year high

PARIS: The number of foreign investment projects in France reached a 10-year high last year, the latest spot of encouraging news for President Emmanuel Macron as he tries to make the country a more business-friendly destination.

The government’s Business France agency tallied 1,298 investment projects including research facilities, factory openings and expansions, a 16 percent increase from 2016.

Among those were 412 companies who invested in the country for the first time, which Business France’s president Christophe Lecourtier said was a 20 percent increase from the previous year.

And while investors from elsewhere in Europe were behind 58 percent of the projects, the report said American firms accounted for more of the jobs, retaking the top spot from Germany.

Economy Minister Bruno Le Maire, presenting the report at the offices of the US tech giant Cisco just outside Paris, called the increase “the most concrete proof yet that France is back.”

“The strategy we have developed with the president of improving our attractiveness is the right one,” he said, vowing that the government would “do everything to bolster this dynamic”.

The French economy had already topped expectations with 2017 growth of 2 percent, well above the 1.5 percent most analysts had expected earlier last year.

“We were surprised by the number of jobs created, and consumer spending was strong as well, as was investment,” said Jean-Louis Mourier, an economist at Aurel BGC, a brokerage firm in Paris.

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And the policy reforms introduced or promised by Macron, a former investment banker, since his election last May, including corporate tax cuts and eased labour rules, might be starting to pay off.

“They may have had an impact on confidence,” Mourier said. “It might have unlocked projects that were on hold.”

Britain’s looming exit from the EU next year is also prompting executives to turn their focus to France and its neighbours on the continent, with many banks in particular already announcing plans to transfer operations.

‘Choose France’

Business France said the investments created or saved nearly 33,500 jobs, an increase of 11 percent on the previous year.

The investment figures came in the wake of Macron’s “Choose France” conference in January, in which 140 top executives from multinationals pledged a total of 3.5 billion euros of investments over the next five years.

Among the flagship announcements was Toyota’s plans to expand its site near Valenciennes on the Belgian border.

Half of the announcements tallied by Business France on Tuesday were for completely new projects while 42 percent will expand existing ones, with takeovers accounting for the rest.

Manufacturing accounted for the biggest chunk of the projects, with 343, of which engineering made up a tenth.

By country, India represented one of the biggest increases, notching up a 73 percent rise in investment projects in France — notably the decision by IT giant Infosys to open a development centre in the southern port city of Marseille.

The report did not, however, include a count of how many foreign investors may have left France over the same period, and did not put a euro value on the investments.

Consultancy Trendeo said the closure of 30 sites operated by foreign companies had been announced last year, including a Tupperware factory in Joue-les-Tours, western France.

But that figure was lower than the 37 registered in 2016.