FDI growth in the Midlands outpaces rest of UK
The Midlands delivered a strong Foreign Direct Investment (FDI) performance last year, with the number of FDI-backed projects in both the West and East Midlands growing at a faster rate than anywhere else in the UK.
According to the 2022 EY Attractiveness Survey, the West Midlands hosted 78 FDI projects in 2021, up 27.9 percent from the 61 projects located in the region in 2020 – an improvement on its immediate pre-pandemic performance.
The East Midlands hosted 39 projects, up 2.6 percent from 38 projects in 2020.
Across the UK, project numbers grew just 1.8 percent from 975 in 2020 to 993 in 2021.
The West Midlands’ performance means the region has overtaken the North West as the home of the most FDI projects outside London, the South East and Scotland.
Digital technology (21 projects) was a key sector in the West Midlands, while transportation and logistics (9 projects) led the way in the East Midlands.
8.6 percent of investors surveyed by EY said the East Midlands was the most attractive UK region for investment, behind only London, Scotland and the South East.
Simon O’Neill, office managing partner at EY in the Midlands, said: “The Midlands has been a UK FDI success story in 2021, with both the West and East Midlands bouncing back from the impact of the pandemic on inward investment – or, in the case of the West Midlands, charging ahead of where things were before the pandemic started. The regions’ successes have been built on a diverse mix of sectors, whether it’s digital technology in the West Midlands or logistics in the East Midlands.
“Looking ahead, there are reasons for optimism. Across Europe, there is a swing towards investment in manufacturing, a sector in which the Midlands has historically excelled. Combined with the growing importance of ‘cleantech’, the Midlands has an opportunity to establish itself as a European centre for developing and building the green technologies needed for the UK to reach its Net Zero targets. Notably, manufacturing projects tend to bring investment to towns rather than cities, which means they can help levelling-up within regions, not just between them.
“One thing which is consistently very clear from investors is that the strength of local business networks matters when they’re choosing where to site their projects within a country. Local skills and infrastructure, support from regional development bodies and access to regional grants are also part of the mix too, reinforcing the importance of devolving power and fostering local ecosystems. Building a unique sense of place from in its economy will help the West and East Midlands build their attractiveness to investors.”