West Midlands sees best inward investment performance in a decade

THE West Midlands recorded 65 foreign direct investment (FDI) projects in 2014 – the largest number secured in a decade.

The figure represents an increase of 38% on 2013 figures.

According to accountancy and advisory firm EY’s annual UK Attractiveness Survey, the West Midlands is the fourth best performing area of the UK in the attraction of FDI – securing 7.3% of UK projects, compared to 5.8% the previous year. 

Birmingham was ranked the third most successful UK city outside of London for the attraction of FDI in 2014, with 15 projects secured in the city. In 2013 it was was placed sixth with 11 projects.

Coventry makes the top ten cities list in 2014, ranking in seventh place. It didn’t feature in the top ten the previous year.

The West Midlands’ success in securing FDI projects was also replicated in terms of job creation. In 2014, the employment secured from FDI in the West Midlands (4,579) meant that the region was the second best performing area in the UK (behind Northern Ireland).

The employment figures are actually a reduction of 33% on 2013, but they are nevertheless the second largest total the region has seen in the last decade.

Sara Fowler, senior partner at EY in the Midlands: “It’s been an exceptional year for the West Midlands with record project numbers creating more jobs, which has contributed to 2014 being the most successful year for the region in a decade.

“The on-going urban regeneration of Birmingham, along with some of the more recent retail developments and infrastructure investments into the city, have undoubtedly had a positive impact and helped to secure our position as an attractive destination for foreign investors.”

Like many other areas of the UK, the US was the most important source of FDI for the West Midlands in 2014.

However, the West Midlands gains a higher proportion of its investment from Germany, India, France and Sweden than the UK as a whole – and a similar proportion of Japanese projects to the UK average.

In common with previous years, the most important sectors in generating FDI into the West Midlands in 2014 were automotive and machinery and equipment.

With 14 automotive projects recorded in 2013 and 13 automotive projects in 2014, the sector has achieved a renaissance in the West Midlands – with the last two years representing the most important years in the last decade for projects from this sector (125% increase in projects from 2013-2014 compared to 2011-2012).

The West Midlands recorded its highest number of inward investment projects from manufacturing operations (48%) in 2014.

The region has also achieved success with food, plastics and electrical projects.

Three automotive related projects are placed within the five largest projects in employment terms for the West Midlands. The projects carried out by Jaguar Land Rover, Amtek Auto Group and the Brose Group together accounted for 1,300 new jobs.

The largest single investment in employment terms however was undertaken by Extraenergy, which created 1,000 jobs in a HQ project in Birmingham.

Neil Rami, chief executive of Marketing Birmingham, said: “This region has never been more attractive to investors.

“It has caught the interest of companies across the world, led by the region’s highly competitive manufacturing sector, which is attracting more foreign direct investment projects than any other industry.”