Every year, French Foreign Trade Advisors (CCE) measure the attractiveness of the French territory for foreign investors. This evaluation, based on twelve criteria, results in an overall score: Regional Attractiveness Index (RAI) produced in partnership with Eurogroup Consulting.
The slight fall in the overall Index observed last year is confirmed, if not accelerated, and the average score fell back to its 2017 level for the first time.
For this 2024 edition, nearly 1,600 advisors responded to the survey, or 36% of CCE.
For the second year running, the Area Attractiveness Index is down, with a decline affecting almost all criteria, and even more so that of personal safety.
In spite of respondents' clear support for the current reforms, France's brand image is deteriorating. The set indicators are down, with the exception of energy supply and energy costs, which are on the rise (+8.8 points) after a sharp downturn last year due to the energy crisis.
The overall index continues to fall, returning to its 60/100 level.
While personal safety lost 11.8 points,
energy supply and cost of
energy improved by 8.8 points
The criteria that are traditionally weak, but which investors consider to be structuring factors in their choices, such as taxation, administrative and regulatory burden, or labor flexibility and social climate, have seen a slight improvement over the long term.
By 2024, however, this trend will be offset by a deterioration in France's traditional strengths as an attractive destination: personal safety (-11.8 points), quality of life and the environment (-5.5 points), cultural environment (-4.5 points) thus posted the sharpest declines.
The cost of energy, the top criterion for investors in 2024
For the first time, respondents were asked to specify which criterion they considered to be the most important for investors' choices. Energy supply and costs top the list, with 18 % of responses, neck-and-neck with administrative and regulatory burden, cited by 16 % of respondents.
The consolidation of energy policy and, in particular, the development of renewable energies and the electrification of the vehicle fleet, garnered 62% of positive opinions.
Unsurprisingly, CCEs continue to pay close attention to developments in the French government's fiscal policy. Respondents also have high expectations of implementing the France 2030 plan to support innovation.
France's attractiveness to European neighbors improves
For foreign investors, France is more attractive than Italy, Belgium and, this year, the Netherlands. On the other hand, the balance is slightly in Germany's favor and, for the first time, in Spain's favor. The attractiveness gap vis-à-vis Europe's leading economy is nevertheless tending to narrow, due in particular to the impact of energy costs on German industry. The relative attractiveness of the UK, down since the Brexit, continues to fall.
The continuation of this positive trend of catching up with certain European countries will be largely determined by the continuation of tax and administrative simplification policies, essential criteria for foreign investors.
Survey methodology
The Indice d'Attractivité du Territoire (IAT) is an online survey, based on voluntary participation and accessible to the entire network of Foreign Trade Advisors, i.e. some 4,500 CCEs, nearly two-thirds of whom are based abroad in over 150 countries.
They are asked to assess potential investors' perception of France's attractiveness according to twelve criteria:
- administrative and regulatory burden
- taxation
- quality of workmanship
- labor costs
- flexible working and social climate
- legal certainty
- energy supply and cost
- infrastructure quality
- innovation and research capabilities
- quality of life and environment
- personal safety
- cultural environment
