Global Investors Looking More Closely At Europe

Manufacturing investors still eyeing China, while Poland also attracts large projects.

LA BAULE, France (AP) - Europe has improved its standing with global investors in the past year as big corporations grow cooler on China and India, according to a study published Wednesday.

But many countries are struggling to turn investment euros into new jobs, the study by Ernst & Young also showed, and their future attractiveness depends heavily on economic reform.

The global accounting firm unveiled its findings to senior executives and politicians attending the World Investment Conference in La Baule, western France, drawing on its own databases and a survey of more than 1,000 decision-making executives by pollster CSA.

Some 68 percent cited Western Europe among their top three investment areas in 2006, up 5 points from last year. Central and Eastern Europe won 52 percent backing.

China and the United States scored the highest ratings for individual countriesĀ - both were placed in the top three by 41 percent of those polledĀ - but lagged Europe as a region. China's 2006 score was 11 points lower than last year's.

''International decision makers' perceptions in 2006 show a preference for traditionally low-risk locations,'' the study said.

''This trend explains the strong positioning of Europe this year.''

But a European resurgence hangs on economic reform prospects, the survey said, citing the 57 percent of decision makers who said future attractiveness depended on serious reforms.

China is the unsurprising favorite for manufacturing investment, with 18 percent of first-choice preferences, the study also showed, and India remains the call center leader, with 14 percent, down from 22 percent last year.

But when it comes to locating headquarters, North America held the lead with 20 percent of first-choice preferences - down from 23 percent - with Germany now snapping at its heels after narrowing the gap to 4 points from 9 points. Britain and France were next in line.

Although Europe attracted more investment projects than ever before in 2005, the number of new jobs attributed to foreign investment fell almost 14 percent to 197,000.

Job creation fell most sharply in Western Europe, the study said, while Poland was ''at the head of a group of countries attracting large, mostly manufacturing projects.''

Investment in Poland created 38,000 jobs, bumping Britain into second place in 2005, the survey found.

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