Record amount of foreign direct investments arrived to Hungary fifth time in-a-row in 2019

Record amount of foreign direct investments arrived to Hungary fifth time in-a-row in 2019

2020. 01. 08.

Record amount of foreign direct investments arrived to Hungary fifth time in-a-row in 2019

In the history of the Hungarian Investment Promotion Agency (HIPA), it happened in 2019 for the first time that the number of foreign direct investments (FDI) in Hungary exceeded 100. In the last year, a total of 101 projects attracted investments worth EUR 5,350 million, creating 13,493 new jobs. The attractiveness of the Hungarian investment environment is well illustrated by the fact that the 101 investments are linked to 21 different countries and take place in 20 different sectors.

Thanks to the favourable investment environment, Hungarian workforce performing on high level, lower taxes on labour, and the support system, the number of investments was higher than ever in Hungary in 2019. The number of projects implemented saw a 3% increase and a 24% growth in the investment volume as compared to 2018, while the number of resulting jobs decreased by 21% driven by a shift towards higher added value and a shrinking labour market.

On the basis of the investment volume and job creation in 2019, South Korea ranks first by far, accounting for almost half (47.8%) of the total value, with a volume of EUR 2,557 million, and representing 32.4% of total job creation. The strong performance in South Korea is mainly due to the expansion of the capacities of Samsung SDI producing batteries for electric cars and SK Innovation, which together represent a capital investment of approximately EUR 2 billion and create 2,200 new jobs in the region of Göd and Komárom.

In terms of the number of projects, broken down by relations, Germany should be highlighted with 24 projects, just like in the previous years. These are mostly reinvestments of companies already present in Hungary worth EUR 808.33 million altogether. German investments are also dominated by developments related to the new automotive era, that is, electromobility. An example is AUDI HUNGARIA's e-transformation project, the majority of which is aimed at expanding the production of e-engines in Győr. It is also important that the Schaeffler Group builds a new factory in Szombathely to produce state-of-the-art components in the field of electromobility.

In terms of investment volume, the electronics industry is ranking first. Nearly 70% of the sector's investment value of more than EUR 2.2 billion is related to two large South Korean battery-related projects. In addition, six other suppliers related to battery manufacturing chose Hungary as the location of their investment.

The business services sector (BSC) also performed excellently: the number of projects in the last year was higher than previously. In 2019, 14 decisions were made in this area, including two significant new players, as Sanofi and Tesco have already been present for decades in manufacturing and trading in Hungary.

It is also an important tendency for the country to become even more balanced in terms of territorial distribution. In 2019, at least one new investment was made in each county of Hungary. Most investments (18) are related to Budapest, followed by Pest County (14), while Komárom-Esztergom County is ranking third (13).

HIPA achievements continue to be recognized by numerous international awards received in 2019. It happened for the first time in April 2019, at the Annual Investment Meeting (AIM) congress that HIPA and Hungary won the Best Investment Environment and Investment Agency Award in the region of Central and Eastern Europe and Turkey. According to the Global Best to Invest 2019 report of the Site Selection magazine, Hungary ranked second in the top 10 investment destinations of the world for the second time, repeating its performance in the previous year and HIPA also retained its first as the region's best investment promotion agency. And the fDi Magazine's FDI Strategy 2018 – R&D Support Award confirms the success of the investment support system redesigned in 2017 and the steady increase of the proportion of high value-added projects of "Invented in Hungary" type.

According to the IBM-PLI Global Location Trends Report, published in September 2019, Hungary ranks 16th globally in terms of jobs created by FDI, while it is the 5th in terms of data per million population globally. The added value of new jobs was enough for the 11th place for Hungary in the global ranking, stepping five places up from the previous survey, getting ahead of Germany, USA, and South Korea, among others. According to IBM-PLI data, in the automotive industry, Hungary is the fourth most important investment target, after the USA, Mexico, and China. It is also noteworthy that Hungary ranks 9th among the most popular venues for research and development projects worldwide.