2007 Report on Foreign Direct Investment in France

ImageAuthor : AFII (Chief-editor : Fabrice Hatem)

Although it did not match the exceptional results observed in 2006, which saw job creation rise to a record peak of 40,000 jobs, 2007 was nevertheless a good year in terms of the number of jobs being created, that followed in the positive trend that has been observed since 2002. 34,517 jobs were created in 2007, which is a reduction of 13.7% compared to 2006, but an increase of 51% compared to 2002. The number of projects (624) was lower than in 2006 (-6.2%). However, this is the third highest result since the IFA Review was established in 1993. The reduction in the average size of investment projects (55 jobs), was due to the increase in the number of investment projects in the services sector, which are generally smaller than those in the manufacturing sector.

European companies remain the main source of international investment in Europe. This is due to the single European market dynamic, but also to the fact that these companies give priority to their own region in terms of international development strategies. This trend continued in 2007, since European businesses were the source of some 67.4% of total job creation. Job creation generated by North American businesses fell from 27.2% in 2006 to 18.8% in 2007 (6,473 jobs), probably due to the decline in the economic climate in the United States. However, the USA is still the leading investor in France. In terms of investment from Asian businesses, this increased considerably, with 4,654 jobs created ( 13.5% more than in 2006).

The number of jobs created in the service sectors, as a percentage of the total, was up by 3 points, reaching 39.5% in 2007. This increase was due to the transport and other commercial and financial services sectors, whereas the business services and software sectors showed a downward trend. The manufacturing industry, which had shown a slightly more positive performance in 2005-2006, continued its previous downward trend accounting for only 60.5% of total job creation compared with 63.5% in 2006. Sectors most affected by this decline included the aerospace equipment, and the chemicals and plastics industries.

Accounting for 35.3% of the Review total, the number of business creations remained stable compared to last year. Business extensions represented 30.9% of the total. Major business extension projects in 2007 included: in the services sector, business extensions by various consulting and business services companies (KPMG, Bearings, EDS…) and in the industrial sector, extension of the Bombardier site in the Nord-Pas-de-Calais, Fuji Autotech in the Doubs and SKF Aerospace in the Drôme.

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