The growth hit its highest level since 2000 on the back of mainly UK and US investment in software, financial services and pharmaceuticals. The impact on jobs was considerable as well, with a 17% increase in job creation attributable to FDI projects.

The country remained overweighted towards the capital, as Dublin took half of the spoils, showing an imbalance matched only by London's outsized profile in the UK.

But the good news was tempered somewhat by Ireland's below-average performance relative to the European average. Overall, Europe enjoyed a 15% rise in the number of FDI projects in 2006, led by a surging UK . . .the most attractive destination for inward investment with a 30% increase on 2005.

However, many eastern and central European countries seem to have plateaued in terms of attracting new investment as the services sector began to assume greater importance relative to manufacturing. Hungary, the Czech Republic and Poland all had a reduction in the number of new inward investment projects over the last year, suggesting that those countries might not be the long-term low-cost threat to western Europe that most commentators assumed they would be when they joined the EU in 2004.

Perhaps the biggest surprise in the survey was the news that India had become the second-biggest source of inward investment into the UK after the US. Indian investment overall in Europe increased by 66% in 2006 to 2.2% of the total . . . on a par with G8 member Canada.

The US remained by far the largest FDI contributor across all countries, accounting for 28% of all Europan projects. Germany, its nearest competitor, accounted for less than half that level, while the UK was a distant third at less than 7%.