World Investment Prospects Survey 2009-2011

Main results of an UNCTAD surveyamong large TNCs

EMBARGOThe contents of this press release and the related

Report must not be quoted or summarized in the print, broadcast or electronic media before

22 July 2009, 17:00 GMT(13:00 New York, 19:00 Geneva)

Division on Investment and Enterprise

UNCTAD

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Purpose and methodology

Purpose: identify the shape of FDI flows for the coming three years, as well as the factors affecting the investment decisions of the largest TNCs

Methodology: survey roughly 2,000 of the largest 5,000 non-financial TNCs – about 240 respondents

Work carried out directly by an UNCTAD team with the collaboration of a panel of international experts specialized in locational issues

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Main findings of this year’s survey

Most TNCs plan to reduce their FDI in 2009, with some improvement seen in 2010, and a substantial recovery in 2011.

While TNCs throughout the world are affected, those from developing Asia are slightly more optimistic than average regarding FDI prospects.

FDI plans in business-cycle sensitive industries have so far been the most affected by the crisis; according to respondents, FDI prospects are better in service industries than in manufacturing.

TNCs’ investment plans in Western Europe and North America have been the most impacted by the crisis; increasing preference of TNCs for developing economies, especially in Asia

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Sharp impact of the crisis on TNCs’ FDI plans

Impact of various aspects of the crisis on companies' investment plans 2009-2011 (Per cent of responses to the UNCTAD survey)

Source: UNCTAD survey.

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Most TNCs plan to reduce their FDI in 2009, with an improvement foreseen in 2010,

and substantial recovery in 2011

Respondent companies' FDI expenditures plans, 2009–2011, as compared to 2008 (Per cent of responses)

Source: UNCTAD survey.

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Pessimism with regards to 2009 FDI prospects gives rise to optimism for 2011

Distribution of the degree of optimism/pessimism regarding the medium-term FDI

outlook, globally and for the respondent company (Average number of responses)

Source: UNCTAD survey. Note: - 2 = very pessimistic; + 2 = very optimistic.

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TNCs from developing Asia are slightly more optimistic than others for 2011

TNCs' views on global FDI prospects, by home region, 2009–2011 (Average number of responses)

Source: UNCTAD survey. Note: -2 = very pessimistic; + 2 = very optimistic

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Worsening of the crisis and rising protectionism could still temper FDI plans

Importance of risk factors for FDI decisions, 2009-2011 (Average value of responses to the UNCTAD survey)

Source: UNCTAD survey. Note: -4 = large negative impact very likely; 0 = negligible impact very likely.

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The desire to internationalize continues to provide impetus for further FDI

Companies' level of internationalization by various indicators, 2008 and 2011 (Per cent of responses)

Source: UNCTAD survey.

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FDI plans in business-cycle sensitive industries have been the most affected by the crisis

Impact of the economic downturn on TNCs’ investment plans, 2009–2011, by sector/industry

(Average number of responses)

Source: UNCTAD survey.

Note: 0 = no effect; - 2 = very negative effect. a Excludes pharmaceuticals.

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FDI prospects are globally better in the service industries than in manufacturing

Expected evolution of companies' FDI in 2011 since 2008, by industry (Average number of responses)

Source: UNCTAD survey. Note: -4=very sharp decrease (more than 50%); +4 = very large increase (more than 50%).

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Western Europe and North America have been so far the host regions most affected by the

downsizing in TNCs’FDI plans

Regions/groups most affected by the reduction in TNCs' investment plans for 2009–2011 (Average number of responses)

Source: UNCTAD survey. Note: Figures may add up to more than 100% due to possible multiple responses.

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Increased preference of TNCs for developing economies, especially Asia

Investment preferences, by host region/group, 2008 and 2011 (Average number of responses)

Source: UNCTAD survey. Note: 1 = marginal or nil; 5 = very important.

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BRICs dominate the top 5 most attractive economies for FDI

The 15 most attractive economies for the location of FDI, 2009-2011

(Per cent of responses)

Source: UNCTAD survey.

Note: Figures in the parenthesis indicate the ranking in the previous survey.

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Size and growth of market are the major location determinants

Locational criteria in order of importance, 2009-2011

(Per cent of responses)

Source: UNCTAD survey.

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Thank you for your attendance!

Additional information is available online at:

http://www.unctad.org