2019 marks another record year in FDI for Hungary

2019 marks another record year in FDI for Hungary

2019 marks another record year in FDI for Hungary

Topping all previous records, the volume of investments successfully negotiated by the Hungarian Investment Promotion Agency (HIPA) amounted to EUR 5,350 million in 2019, exceeding the previous year's amount by 24%. As a result of the 101 projects realized based on the positive decision of investors, 13,493 new workplaces are to be created in Hungary. By analysing the results of the previous year, the most important trends are the surge of investments from Asian countries, the strengthening of the electromobility sector, as well as the increasing number of high value-added projects in the services industry. Furthermore, the competitiveness of the Hungarian investment environment is well illustrated by the fact that the 101 investments can be linked to 21 different countries and take place in 20 different sectors.

2019 marks another record year in FDI for Hungary

2019 marks another record year in FDI for Hungary

By examining the results based on the country of origin of the investments, it can be established that 2019 was about the Asian investors, and especially about South Korea, Japan and China. In addition to the traditionally strong set of German and US investors, Far Eastern partners gained a lot of strength and South Korea secured first place both in terms of investment volume (nearly 50 % in itself) and the number of newly created jobs (over 30%) last year. Including Japan and China a total number of 19 Eastern Asian investments were received, which represent 38 percent of the created jobs.

The other trend that can be identified based on the 2019 results is also partly due to the sweep of Far Eastern countries: the penetration of electromobility. By eight different large companies manufacturing batteries for electric cars a positive decision favouring Hungary was made for 10 investments, totalling EUR 2,850 million by Samsung SDI, SK Innovation and Toray among others, which amount to more than half of the entire volume. Adding those automotive industry investments to the battery manufacturing projects, which are also related to e-mobility, result in a total of 60 percent of the investment volume and 40 percent of newly created jobs. These investments include for example the e-transformation project of Audi, which aims at extending the manufacturing capacity of electric drivetrains, the greenfield investment of the Schaeffler Group in Szombathely and the investment by Infineon in Cegléd.

The top three countries of origin in terms of investment volume

The top three countries of origin in terms of investment volume

The third prominent tendency is the ongoing stable growth of business services centres (BSC): more than ever before, 14 investment decisions were made last year, creating over 2,500 new workplaces with high added value in the upcoming period. The 14 projects also include two new and significant stakeholders: both Sanofi and Tesco have been present with their manufacturing and commercial activities in Hungary for decades, however, they only recently opened to the BSC sector.

Besides sectoral diversification, geographical distribution is also getting more balanced in the country. 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).

Hungary's achievements continue to be recognized by numerous international awards received in 2019. HIPA and Hungary have received the AIM Investment Award for the first time in 2019 at the Annual Investment Meeting (AIM) congress recognizing the Agency's results and the country's favourable investment environment. Hungary ranked in the top 10 investment destinations of the world, repeating its performance in the previous year, according to the Global Best to Invest 2019 report of the Site Selection magazine, a publication specializing in investment topics, and HIPA retained its title as the region's best investment promotion agency.

According to the IBM-PLI Global Location Trends Report published in September 2019, Hungary ranks 16th globally in terms of jobs created by foreign investment, 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.