Queensland well positioned for investment in key sectors

As markets react to these headwinds, Queensland businesses could benefit from positioning themselves as attractive, low risk destinations for global foreign investment.

Global foreign direct investment (FDI) declined by 11% in 2024 (excluding flows through conduit countries), largely driven by escalating trading tensions, geopolitical fragmentation and economic volatility.

UN Trade and Development's (UNCTAD) Global Investment Trends in 2024

• The UNCTAD forecasts continued FDI weakness in 2025, as investors prioritise short-term risk management activities over long-term infrastructure or innovation projects.
• Europe saw a steep 58% decline in FDI inflows, while North America (US) experienced a 23% increase, largely due to company reshoring activities under President Trump’s ‘America First’ agenda.
• Southeast Asia’s FDI grew by 10%, driven by investment diversions from China to avoid tariffs on products exported to the US.
• Despite some significant growth in a declining environment, much of the FDI reflects financial reallocations rather than direct investments that generate local jobs or stimulate economic activity.

Australian Bureau of Statistics FDI snapshot

• Despite global decline, Australia’s FDI grew by 8.3% in 2024, reaching approximately $1.3 trillion, according to the Australian Bureau of Statistics.
• US investment escalated by 14.6% to $235.3 billion, comprising 18.4% of total FDI.
• Key FDI increases came from Japan, Singapore, France and the UK, while FDI from China and the Netherlands declined.
• Leading sectors include:
  • mining and quarrying (31.8%)
  • financial and insurance (12.6%)
  • real estate activities (11.4%)
  • manufacturing (10.1%).

Investment implications for Queensland

Caution in capital allocation

The emerging behaviour of global risk aversion is causing longer timelines for deal making due to increased due diligence, policy certainty and regulatory concerns may impact Queensland businesses’ ability to secure investment quickly.

Opportunities in diversification

Despite current global challenges, Queensland is strategically positioned to attract investment, offering a stable, low risk and tariff resilient jurisdiction particularly in following key sectors:

• advanced manufacturing (e.g. semiconductors, artificial Intelligence (AI))
• renewable energy (e.g. solar, wind, hydrogen)
• agri-tech and food security (e.g. agriculture sourcing and logistics)
• bio and medical technology (e.g. clinical trials, health exports).

Australian Currency and interest rates are favourable for foreign investors

When the Australian dollar AUD is weaker, relative to currencies like the USD, GBP and EUR, it can improve investment value supporting Queensland as an investment destination.

Higher Australian interest rates in the last couple of years can provide higher returns on fixed-income assets offering investors a higher yield on capital invested.

Strategic investment opportunities

Stable growth sectors

• Manufacturing, energy and professional services continues to attract strong FDI, driven by the demand for advanced infrastructure, specialised expertise and resources that support ongoing technological innovation.
• Climate technology FDI has slightly declined, however, the sector remains a stable investment area, supported by ongoing global priorities around sustainability and food security.
• Bio and medical technology is a rapidly expanding sector, underpinned by growing demand improved healthcare services.
• Venture capital investment (private equity financing) in Australia reached $4 billion in 2024, with just 6% allocated to Queensland, highlighting significant potential for grown in the state’s start up and innovation ecosystem.

Olympic driven infrastructure investment

Investment in infrastructure for the Brisbane 2032 Olympic and Paralympic Games across Queensland enhances long term, certainty and strengthens the state’s investment appeal.

• Government backed projects in infrastructure, healthcare and supply chains are expected to attract foreign interest in the lead up to the Olympics.
• Historical trends suggest that investors are more confident when their capital aligns with publicly funded initiatives, as this signals policy support and can ease navigation through regulatory processes.
• The Olympics presents a global platform to showcase Queensland’s regional strengths, helping to highlight local opportunities and differentiate the state from others across a diverse investor base.

Reshoring and supply chains

• US tariffs on strategic sectors such as Semiconductors and AI are accelerating the shift towards ‘friend-shoring’ with companies seeking to relocate operations to trusted US partners.
• Australia’s strong international partnerships, transparent trade policies and reputation for stability positions Queensland as an attractive alternative partner. Further, Queensland's proximity to Asia, robust infrastructure and readiness to support global supply chain realignment for FDI companies.

Key takeaways for Queensland exporters

Competing in a changing global investment environment

Steps Queensland businesses can take

• Highlight trade advantage – showcase Queensland’s strong global partnerships, competitiveness access to US markets and lower tariff risks.
• Align with reshoring trends – demonstrate capabilities to support production through reliable infrastructure and logistics.
• Promote regional strengths – share local success stories, workforce readiness and sector specific advantages to build investor confidence.
• Stay informed – monitor developments from UNCTAD, Department of Foreign Affairs and Trade (DFAT), Austrade and The White House trade updates to understand global investment signals and risks.

Sources: United States Bureau of Economic Analysis, Australian Bureau of Statistics and TIQ analysis.