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A.T. Kearney: Overridingly positive outlook develops for global economy

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A.T. Kearney: Overridingly positive outlook develops for global economy

China holds at #2, Canada rises to #3, Europe sees high level of confidence.

Global management consulting firm A.T. Kearney today released its 2014 Foreign Direct Investment Confidence Index, an in-depth view of forward-looking investment sentiment. In this year's ranking, the U.S. not only maintains its first place position from last year, but also increases the lead it had in the 2013 study.

The findings bode well not only for the U.S., but for the global economy: Nearly four out of five respondents are more optimistic about the global economy than they were a year ago. Since its inception, the study has consistently pointed toward top global choices for foreign direct investment, with the top 10 most attractive FDI destinations receiving a majority share of global FDI inflows roughly one year after the survey.

"Corporations sitting on massive cash reserves are increasingly confident that they can parlay these into productive investments with attractive returns."

With an unprecedented swing in positive outlook by global executives surveyed, half of the respondents indicated that they have a more positive outlook on the U.S. than two years ago.  No country has ever recorded a higher positive outlook from investors in the history of the Index.  Driven by overriding factors such as the increasingly strong prospect of U.S. energy independence, leading executives continue to plan increased investments in the U.S. 

Paul A. Laudicina, founder of the FDI Confidence Index and A.T. Kearney chairman emeritus, notes, "Despite racking volatility and economic uncertainty on a global scale, the findings from the 2014 FDICI suggest that a corner is being turned. Corporations sitting on massive cash reserves are increasingly confident that they can parlay these into productive investments with attractive returns."

Key survey highlights include:  Despite unresolved deficits in the euro zone, 11 European countries still rank in the top 25, some entering the ranking for the first time; Canada moved up to the third spot; 39 percent of respondents voiced a more positive sentiment than last year for second-ranked China; and Russia (last year's #11) fell off the top 25 ranking, despite the fact that the survey was fielded prior to the current political imbroglio in Ukraine.

"We feel confident that despite a slow and uneven economic recovery, executives who make FDI decisions are regaining a sense of measured confidence," said Erik Peterson, A.T. Kearney partner and a co-author of the study. "The 2014 FDICI is not only an indicator of FDI flows, but an excellent telescope into specific economic stories around the globe. We're pleased that this year's study portrays a more optimistic picture globally."

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