Foreign firms invest in France
2014 saw a sharp increase in overseas firms launching projects in France – but they did not create large numbers of jobs
BUSINESS projects in France by foreign firms hit a record number last year says a new report – but did not translate to high numbers of new jobs.
An annual study by EY (formerly Ernst & Young) shows that there were 608 new business projects by overseas firms in France in 2014, which was 18% up on 2013. While progress is up in Europe overall, France did markedly better than the average increase of 10%.
However, while Europe as a whole also saw a record number of new jobs linked to these projects (185,500) the number was not correspondingly high in France.
At 12,577, the number was down 11% on 2013, while the European average was an increase of 12%. What is more, the number of jobs per project (20) has never been so low.
France was fourth in Europe (in the continental sense, including Russia) in the number of projects, and number one in industrial ones, however many were extensions of existing operations in France rather than brand new sites.
In the case of the industrial ones the split was 80% / 20%, corresponding to 188 ‘extensions’ and 43 new sites which were cancelled out by a total of 49 closures in the same year.
EY says France continues to face stiff competition, notably from the UK and Gemany. “It’s on a razor’s edge, but is still holding its own,” Marc Lhermite of EY told La Tribune.
EY says firms have concerns due to a cost of employment still seen as high in terms of tax and social charges. It says they often create research centres in France, enlarging existing sites, but when it comes to brand new sites, they often look elsewhere.
The study, which included interviewing 206 business leaders on their impressions of France, found that 44% (compared to 34%) thought it was important France should lower the cost of work. The second most important factor mentioned was easing the administrative and legal burdens on businesses (cited by 40%, up from 32%).
EY say they expect the general trends to continue this year – with the European economy somewhat improving, and the value of the euro low compared to the dollar, international firms are seeing production in Europe as increasingly attractive.
