Overseas investment soars in the West Midlands
The West Midlands topped the charts for attracting foreign direct investment outside of London, with 127 FDI projects in 2023.
According to the latest EY UK Attractiveness Survey, the region’s project total was 72% higher than in 2022 and raised its share of all UK projects to a decade-high of 12.9%.
An increase in employment with FDI projects was also seen, with a 9.2% boost to jobs to 6,784 – the region’s highest recorded total since 2017.
Birmingham was at the forefront of this growth, leading the West Midlands and outperforming all other UK cities outside of London. The city recorded 67 FDI projects in 2023, setting a record for the highest number of projects managed by any city outside the capital in the last ten years.
The East Midlands however dropped to second-to-last place when it comes to attracting overseas investment.
The region recorded 31 projects in 2023, a 35% decrease from the previous year. This decline marks the second-lowest total of foreign direct investment (FDI) projects for the East Midlands in a decade, causing its share to drop to 3.1% of all UK projects. The East Midlands ranked as the UK’s tenth best-performing region in attracting investment.
It recorded almost the same number of jobs associated with FDI projects in 2022 as in 2023. The total in 2023 was 2,848, ranking the East Midlands eighth out of twelve UK regions for FDI-associated employment.
The software and IT services sectors have been a significant driving force behind the West Midlands’ FDI success, contributing 38 projects – the sector’s highest project total in the region since 2017.
Transportation manufacture and supplies, along with machinery and equipment, also saw substantial investment, recording more projects in 2023 than the average for the decade, with 18 and 13 projects respectively.
In contrast, the East Midlands’ FDI performance was led by transportation manufacturers and suppliers with seven projects, followed by agri-food with five, and machinery and equipment and software and IT services, each with four projects.
Simon O’Neill, Office Managing Partner for EY in the Midlands, said: “The West Midlands recorded a meteoric rise in inward investment last year, a clear indicator of the region’s strong economic potential and its growing appeal to international capital. Birmingham’s exceptional performance, leading the charge with 67 projects, exemplifies the city’s strategic position as a hub for innovation and business growth.
“While we celebrate these successes, we remain committed to understanding the challenges faced by the East Midlands and to supporting its efforts to regain momentum in attracting global investment. The West Midlands success story is not only a win for the region but also a significant contribution to the UK’s position as a prime destination for foreign investment.”
Neil Rami, Chief Executive of the West Midlands Growth Company (WMGC) – the region’s official investment promotion agency – said: “These figures reinforce the West Midlands as a strategic necessity to inbound investment. Despite challenging macro-economic conditions, the region has bucked a trend of decline, witnessing UK-leading, and record-smashing growth in FDI.
“This success can be attributed to the strong economic fundamentals of the region; our talentpool, innovation-led R&D and business ecosystem form an attractive proposition to investors. Critically, WMGC’s Global Growth Programme, intensive international relations and targeted marketing helped convert this interest into tangible investment – from which thousands of new jobs have been created.”
