Yorkshire considered the most attractive destination for investment in the North

Yorkshire and the Humber was home to 40 Foreign Direct Investment (FDI) backed projects in 2021, according to the 2022 EY Attractiveness Survey, which also named it the place investors considered most attractive in the North.

The region’s 2021 performance was down on both the previous two years which had seen 55 and 59 projects secured respectively.

The leading location for FDI in Yorkshire was Leeds which secured 15 projects making it the seventh biggest UK location for FDI outside of London.

Yorkshire was not alone in falling project numbers with neighbours the North West also seeing a drop to 74 down from 85 in 2020, while the North East saw a decline of two and recorded 30 projects in 2021.

The report suggests that Yorkshire and the Humber’s decline from 2020 is largely down to a fall in its share of ‘new’ – rather than extended – UK projects. Having secured 5.4% of new UK projects in 2020 and only 3.4% last year.

Looking at the macro data the region secured 4% of all projects contributing to the North’s 14.5% stat which again dropped from 2020 but remained in line with that of 2019.

Despite the fall in projects Yorkshire and the Humber, the region was described by 5.2% of investors surveyed as the UK’s most attractive place to invest, placing it ahead of both the North West and North East.

The region also significantly improved the performance of one its key digital technology having secured 10 projects in 2021, double that of the previous period.

Manufacturing projects however regained their place as the region’s leading investment activity (11 projects) for the first time since 2017, while business services (10) and Research & Development (nine) rounded out the top three. R&D projects were at their highest level in the last decade.

Suzanne Robinson, EY’s Yorkshire Managing Partner, says: “Yorkshire had a challenging year for FDI in 2021, as did the wider North of England. Beyond the headline figures, however, there are still reasons for positivity. Yorkshire has done well in some high value areas, particularly digital technology and Research & Development. It’s not just the volume of projects that matters – one high value project can bring more jobs and investment to the region than five smaller ones.

“Across Europe, there is a swing towards investment in manufacturing, a sector in which Yorkshire has historically done well. Combined with the growing importance of ‘cleantech’, the region has an opportunity to establish itself as a key European home for developing and building the green technologies needed for the UK to reach its Net Zero targets.

“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 Yorkshire and the Humber build its attractiveness to investors.”

Sir Roger Marsh OBE DL, chair of the Leeds City Region Enterprise Partnership (LEP), commented on the results: “At 7th overall, Leeds continues to be one of UK’s most attractive cities for inward investment outside of the capital, securing 15 deals in 2021, while Yorkshire as a whole has grown in attractiveness over the past year as other areas across the North have declined.

“Against the backdrop of the Covid-19 pandemic, this strong performance shows clearly that Leeds and West Yorkshire are an attractive proposition to potential investors. We expect interest in the region will continue to grow as we recover from the pandemic.

“In sectors such as business, professional and financial services, legal services, the digital, creative and cultural sector, and health and life sciences, our region is one of the leading locations in the UK, with a well-deserved national and international reputation for excellence.

“The report suggests that business services and healthcare are set to be among the main drivers of future investment. With the Bank of England, UK Infrastructure Bank and the Financial Conduct Authority in the region, alongside six NHS and national public health headquarters, with £130 billion of NHS spending commissioned from Leeds, we are well positioned to capitalise on this trend.

“This is backed up with our skilled workforce, strong local business networks, connectivity and the value for money that we offer, which investors say are among the most important criteria when choosing where to invest.

“The report also highlights the importance of local knowledge and the role that advisers and bodies like the Combined Authority and LEP play in attracting, securing and nurturing investment.

“During my tenure as Chair of the LEP, the region has made great leaps in terms of becoming more attractive to potential investors, to the point that in many cases it is now seen as their preferred location in the North.

“This has been driven in part by the transformational investment we have been able to make in our economy as a result of the £1 billion Growth Deal the LEP secured from the government in 2014.

“The long term prosperity of our region rests on building stronger, more innovative, resilient businesses that can create good jobs for everyone so we can continue to improve living standards for all.”

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