In addition to this, the United Nations Conference on Trade and Development (UNCTAD) estimates that the value of greenfield land in Europe will fall by 20% in 2023, despite increases on other continents.
Despite this decline, executives surveyed remain optimistic, with 75% expecting Europe's attractiveness to improve over the next three years.
72% of executives also plan to expand or set up operations in Europe within the next 12 months.
Why has FDI declined in Europe?
According to the EY report, over-regulation is currently seen as the biggest risk to FDI in Europe.
Europe has led the way on new initiatives including carbon disclosure, data protection and the safe use of AI, but investors worry that a tougher regulatory framework could stifle the growth and agility of European businesses.
Andrew Hobbs, leader of the EMEIA Centre for Board Issues and EY EMEIA public policy leader, said: “EU policymakers can do more to anticipate and understand the impact that new regulations may have on investment attractiveness.
