Cruise ship construction is a manufacturing sector in which France still competes successfully (LOIC VENANCE)

Paris (AFP) – France chalked up the biggest number of manufacturing and R&D projects by foreign investors in Europe last year, a report said Tuesday, boosting President Emmanuel Macron’s claim the country is increasingly open for business.

The survey was the latest to show an improving business climate in France since Macron came to power in 2017 on the back of pledges to implement business-friendly reforms.

But the “yellow vest” protests that have rocked France since last November have raised questions over the future of Macron’s reform project.  

The EY consulting firm counted 144 major research and development deals — an 85 percent surge from 2017 — and 339 manufacturing projects, pushing France past Germany or Britain for the first time.

Even though the total number of foreign direct investment (FDI) deals rose just one percent to 1,027, “France can take comfort from the fact that FDI did not decline by the extent it did in other European economies,” the report said.

Britain, beset by Brexit woes, barely clung on to first place in terms of the total number of foreign investment projects, which slumped by 13 percent to 1,054.

Macron was quick to seize on the attractiveness rankings, writing on Twitter that “France is a leading economy open to foreign investors and talents.”

“France is advancing. We will continue our efforts to have more investment in our country,” he said, using the hashtag #ChooseFrance.

Many executives and government officials had worried that the outbreak of the “yellow vest” anti-government protests last year would cool enthusiasm for France.

The weekly demonstrations often spiralled into rioting and clashes with police in Paris and other cities, though the protests have faded markedly in recent weeks.

The EY report found that Paris currently remained the most attractive European city for foreign investors, surpassing London and Berlin.

– ‘Determined on stated goals’ –

But the protests have nonetheless stalled Macron’s push for widespread economic overhauls aimed at boosting economic growth while cutting into its debt load.

Just 30 percent of respondents thought France’s attractiveness would improve over the remaining three years of Macron’s current presidential term, down from 56 percent last year.

“The yellow vests movement raises questions about France’s ability to enact the reforms necessary to boost its business attractiveness,” the report warned.

Overall in Europe, the number of foreign investment projects across Europe fell four percent last year, to 6,356.

And while Western Europe remains the most attractive region for investment, Britain’s chaotic exit from the EU remains the biggest risk, with 38 percent of investors worried about its consequences on growth and trade.

As a result, just 27 percent of respondents plan to establish or expand operations in Europe this year, down from 35 percent last year, EY found.

A survey by AT Kearney released in May said France had risen two notches to fifth place in the top 10 likely destinations for FDI, the first time it has been in the top five of its FDI Confidence Index since 2002.

It said investor confidence has risen “mildly” since Macron came to office with sentiment “largely unaffected” by the yellow vest protests.

“Despite recent volatility in the political environment, the government appears determined to follow through on its stated goals,” it said.

Despite falls in FDI across developed market in 2018, France remains “competitive in indicators driving investment intentions,” AT Kearney said.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.