Manchester is UK’s second city for foreign investment

Manchester has once again topped the UK league tables as the city attracting most foreign direct investment (FDI) outside of London in 2016.

Last year 47 overseas firms either set up and created jobs for the first time, or expanded their existing operations in the city, according to the annual EY UK Attractiveness Survey. That’s way ahead of Birmingham, which saw 20 projects and Leeds, which had 12.

The wider Greater Manchester area accounted for more than three quarters of the total 90 foreign direct investment (FDI) projects recorded across the North West in 2016 – 60% of which were first time investments in the region from international investors.

Cheshire secured nine FDI projects in 2016 and Merseyside eight projects.

Financial & business services, and manufacturing investors dominated FDI in the region with 36 and 35 projects respectively.

Mark Gregory, EY’s chief economist, told TheBusinessDesk: “What goes to London is very different to what comes to the North and Scotland and we are not often competing for the same investment.

“If we look at manufacturing, quite often manufacturing investments in a factory leads to another investment in logistics, for example. But it is likely that the headquarters or sales office will still be in London if it is an international business but the logistics won’t.

“It is as much about collaboration with London and other parts of the UK as it is about competition.”

The majority of investment in the region originated from the Europe – with 42 projects coming from this trade area – followed by North America, with 27 projects.

On an individual country basis, the US was the biggest investor in the North West region with 25 projects, followed by Germany and France, which both brought in ten projects.  There were four projects apiece from Israel, Denmark and Australia.  In all FDI in the North West was generated from 26 different countries across the globe.

Bob Ward, North West senior partner at EY said: “The work that has taken place to position the North West, and indeed, the whole of the North of England, as a strong investment location in the global marketplace is starting to pay off.  These figures show that the international investment community sees the potential in the region, with its access to the right skills, infrastructure and strong supply chain networks.”

61% of all FDI projects in the North West region were announced before the EU Referendum vote in June 2016, with 39% announced after this date.

Gregory said: “The research suggests that the EU Referendum vote and its aftermath may be having an influence on global perceptions of the UK’s medium to long-term attractiveness. Western European investors are twice as negative as Asian and North American investors.

“Decisions on the majority of investments made in 2016 would have been made up to three years ago, which helps to explain the UK’s solid performance last year, but signs of a slowdown are on the horizon.”