North West still a magnet for foreign investors, says E&Y

THERE was a 70% surge in the number of jobs created by foreign companies in the North West last year, accordting to a report by Ernst & Young.

This firm’s annual UK Attractiveness Survey shows that 3,715 jobs were created in this region during 2011 by foreign direct investment (FDI) – a 70% increase on the 2010 figure (2,187).

Encouragingly the North West ranked third (behind Scotland and the East Midlands) by number of jobs created, out of 12 UK regions, ahead of London.

Despite the increase in the number of jobs created, the number of FDI projects in the region fell from 64 in 2010 to 39 in 2011.

Simon Allport, Ernst & Young’s North West senior partner said: “It is encouraging that the number of jobs created by foreign investors was significantly up last year, but we should not let that cloud our long term view. The number of FDI projects attracted to the North West is down 39%.

“It is crucial that we attract FDI to drive employment and business growth. To make the region more attractive, foreign investors tell us that we need to focus on: R&D and innovation, developing education and skills and creating a strong economic environment.”

Commenting specifically on the fall in project numbers, Mr Allport added: “The number of FDI projects locating in the North West fluctuates year to year. What makes the real difference to our economy is job creation.

“It remains to be seen how the closure of English Regional Development Agencies, announced in 2010, will affect the number of FDI projects attracted to the regions in the future.”

According to E&Y Greater Manchester remains the magnet for inward investment in the North West. attracting 23 of the 29 projects last year, compared to seven in Merseyside, five in Cheshire and four in Lancashire.

One of the largest projects, by jobs created, as Indian outsourcing provider Aegis, which will create 600 jobs, in its Manchester city centre base.

Other projects included: the expansion of German owned Veka UK in Burnley; the creation of 800 jobs by US owned ASDA, which opened a distribution centre in Rochdale; the expansion of Getrag Ford Transmissions in Halewood; and Etihad Airways, the national airline of the United Arab Emirates, created 160 jobs at its new contact centre in Manchester.

The top three sectors for generating employment from foreign investors in the North West were: financial services (1,009), logistics (850), and business services (618).

The region attracted investment largely from the traditional locations of the US (12 projects) and Germany (9) compared to India (2) and China (1).
 
Nationally, 679 FDI projects were attracted creating nearly 30,000 jobs – despite a 7% decline in overall projects.

The report found that the UK’s most attractive qualities among foreign companies are its quality of life, culture and language, stable political environment and infrastructure.