According to Bloomberg Media’s FDI Outlook 2025, Australia ranked third in the Asia-Pacific for foreign direct investment confidence, behind Singapore and New Zealand, with technology and innovation emerging as the top sectors attracting global investment over the next one to three years.
The study, which surveyed 2,600 senior business decision makers across 31 markets, found that geopolitical concerns have overtaken inflation and supply chain disruptions as the primary investor worry, with 38 per cent of respondents citing US-China relations as a critical risk, up six points from 2023.
However, despite underlying tensions, the report found that appetite for international expansion has remained robust, holding steady at 76 per cent, only 1 percentage point below 2023.
Across the board, artificial intelligence and advanced technologies were recognised as the primary investment opportunities.
For investors focused on Australia, political stability emerged as the most crucial factor, cited by 58 per cent of respondents. This was followed by workforce availability at 54 per cent, and tax costs closely behind at 53 per cent.
Commenting on the findings, global head of data science and insights at Bloomberg Media, Michelle Lynn, said Australia “provides a solid foundation for sustainable growth for FDI investors navigating these uncertain times”.
Zooming in, three leading drivers for investment identified by Australia-focused investors were regulatory technology and innovation (29 per cent), new markets (26 per cent) and financial market development (25 per cent).
Investors considering Australia were found to prioritise access to natural resources, high-quality targets and efficient institutions more than their APAC-focused counterparts and were less concerned with low US tariffs and tax reliefs.
Following the global trend, AI adoption was identified as a top theme, with half of Australia-focused investors considering AI adoption for productivity as the primary opportunity for their business in the coming one to three years. This figure surpassed both the global average of 42 per cent and the Asia-Pacific average of 44 per cent.
It comes amid growing uncertainty regarding the potential for returns on AI investment, as significant productivity improvements have yet to be demonstrated.
Other key opportunities included faster and larger-scale adoption of sustainable energy sources and trade agreements between countries, both identified by 40 per cent of respondents.
Additionally, investors were found to prioritise advanced industries, with 52 per cent identifying advanced technology as their top sector of interest, followed by advanced manufacturing at 39 per cent and IT and computer technology at 35 per cent. Notably, those considering Australia placed 11 per cent greater importance on advanced manufacturing compared to those focused on the broader APAC region.
The report suggested that Australia is well-positioned to capitalise on new opportunities, with Lynn observing the country’s strengths align closely with global investor priorities.
“With clear policy support in areas like artificial intelligence, sustainable energy and advanced manufacturing, the country is aligned to exactly where global investors are looking to grow,” she said.
Looking forward, over half (54 per cent) of the investors considering Australia identified developing local supply chains and logistics as priority, followed by building new commercial facilities and expanding into new territories.
Lynn highlighted that these expansion priorities demonstrate global investors’ sustained confidence in the Australian market.
“Australia is clearly viewed as a place where smart investments can take root and thrive.”
