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As Europe establishes itself on the recovery track, Emerging Europe is increasingly in the sights of investors, according to a survey of investment attractiveness released on May 27.

Ernst & Young notes in its 2014 investment attractiveness survey for Europe - entitled "Back in the game" - that the recent years of the crisis hit European foreign direct investment (FDI) inflows hard. "However, 2013 appears to have been a turning point," say the authors of the survey.

"An FDI record was set in Europe in 2013," the report reads. "Foreign investment decisions in the continent reached an all-time high of 3,955 projects, up 4% from the previous year and 17% from the pre-crisis average."

Central and Eastern European economies are not only joining the party, but are increasing their weight within Europe, being seen as increasingly attractive by international investors, the consultancy says.

East European countries were the continent's worst performers in terms of FDI inflows between 2007 and 2012, with investments into the likes of Romania, Hungary and Bulgaria halving during the crisis and subsequent recession. However, several CEE states beat out Western European rivals in 2013. 

Top of the CEE pile, as ever, was Poland. A survey of the most attractive countries to establish operations in Europe saw the country beaten only by Germany, as it pushed out the continent's other "heavyweight", the UK, to come in second, with 31% of respondents rating the country as the most attractive investment spot in Europe. The Czech Republic came in a distant second in CEE, but was still level with France in fourth place overall, as 11% of respondents made it top spot to start business operations. 

However, the high rankings came despite both regional leaders losing votes compared with 2012. "[M]ature" countries from the CEE region like Poland and the Czech Republic " are losing out to economies in the east, with the main winners being Turkey (+4 points) and Romania (+2 points)," the report notes.

That saw Romania - which is increasingly spoken of as the next star of CEE - jump into fifth place, pushing it to favourite for 9% of respondents. Hungary's erratic government policy has made it anything but a star recently, but the country saw a 3pp increase as it topped the list of destinations for 8%. 

Turkey also outdid most Western European countries, to total 6% in spite of the ongoing political risk and imbalanced economy. Even Ukraine is seen as more attractive than previously, with a 2pp gain making it top choice for 7% of respondents. 

This follows a period during which investment into the region dropped significantly. The report finds that the top five "losers" during this period were all in CEE, which had attracted "substantial investment" throughout the 2000s, but saw a slump during the crisis.

Investment project numbers were down 12% in 2009-2013 compared with 2004-2008, whereas in Western Europe the number increased by 19%. Even crisis-hit economies like Spain were less impacted than CEE, Ernst & Young reports. "Winners" during the crisis included Germany - where project numbers more than doubled - the UK, Spain and the Netherlands. 

The major Western European economies, in particular Germany and the UK, were the main contributors to the record number of investment decisions launched in 2013. This represented a 4% year-on-year increase, and a 17% increase compared with the pre-crisis average. As of 2013, Europe (excluding Russia) was in second place worldwide in terms of FDI inflows after developing Asia.