Foreign direct investment into Ireland rose by 50 per cent between January and June, almost twice the average rate of inward investment in Europe, according to a report released today by Ernst & Young.
As a result, the study estimates that Ireland's share of foreign direct investment has risen to 3 per cent of the EU total, compared with 2 per cent in 2003. Britain claimed the largest slice of investment, with 22 per cent of the EU total.
Inward investment into the EU has grown by 27 per cent in the first six months of this year.
Ernst & Young said that of the 42 projects announced in Ireland between January and June this year 73 per cent involved an expansion by a multinational already based in the State.
Most were in the manufacturing sector, with just eleven projects accounting for 26 per cent of the investment over the first six months. Research and development projects accounted for 17 per cent with sales & marketing initiatives attracting 14 per cent of the funding.
The US remains the largest investing country in Europe, providing funding for 28 per cent of the projects, followed by Japan, Britain and Germany.
However, there is evidence that the most vigorous growth is occurring in Eastern European countries; four of which, Hungary, Czech Republic, Poland and Russia, claimed 20pc of all investment.
The number of projects being undertaken in these countries rose from 156 to 283 in the first six months of the year.
According to Mr Des McCann, head of project finance at Ernst & Young Ireland the results were encouraging from Ireland's point of view.
"While traditional locations for foreign direct investment in Europe such as France and Spain continue to see a fall-off in investment figures, Ireland continues to hold its share at around 3 per cent.
"Given the continued trend towards the East, this remains a very credible performance. Ireland continues to benefit from investment in traditional areas such as computing and software."
However, he noted that if the pace of investment in Eastern Europe is maintained the pattern of Foreign Direct Investment in Europe would be radically changed.
"While there is a natural drift eastwards as those markets open and lower cost possibilities present themselves, it seems at this stage of the recovery, there is plenty to go around for both East and West Europe".