The East Midlands recorded a “resilient” year for inbound Foreign Direct Investment (FDI) in 2020, outperforming the overall UK and European outcomes and delivering a strong performance against the backdrop of the global pandemic, according to the EY 2021 UK Attractiveness Survey which launched today (Monday 7 June).
The region registered 38 overseas-backed projects in 2020, a decline of just one – 3% – from the 39 in 2019. By contrast, there was a 12% decline in UK projects and a 13% decline in the overall European market. This helped increase the region’s share of the UK FDI market from 3.5% to 3.9% – its highest share in the last decade.
The East Midlands’ positive performance was driven by gains in the transport and logistics sector, where the number of FDI projects more than doubled from six projects in 2019 to 15 projects in 2020.
Other key sectors for the East Midlands were agri-food with five projects (down from seven in 2019) and machinery & equipment with five (up from four). The UK’s leading sector, digital technology, accounted for just one project in the region.
Projects in the East Midlands were most likely to involve logistics activities (15 projects, up from nine), followed by manufacturing (nine projects, down from 11) and sales and services (seven projects, down from 13).
Out of all UK regions and constituent nations, the East Midlands recorded the eighth highest number of projects.
Nottingham was the region’s leading city with 10 projects, significantly ahead of its decade average of four. The 2020 performance meant Nottingham was the UK location with the joint 12th highest number of projects (alongside Coventry and Peterborough).
The other East Midlands location in the UK’s ‘top 20’ was Northampton, ranked joint 15th with nine projects – again, significantly ahead of its decade average of three. Northampton and its surrounding areas benefitted from a pandemic-accelerated shift to online commerce and a need to boost capacity.
Simon O’Neill, office managing partner at EY in the Midlands, said: “Against the backdrop of a global pandemic, the East Midlands delivered a positive year for FDI in 2020. The impact of both the pandemic and the UK’s departure from the EU can be seen in how some of the region’s key sectors have performed too, particularly the strong performance of the distribution sector and logistics activities. The region has adapted quickly to changing circumstances.
“With businesses more keenly focused on supply chains, the East Midlands is well positioned to attract investment in these areas in the next few years.
“According to our survey, the key criteria investors will consider when looking outside London are the availability of the skills of the local workforce, the strength of local business networks, and access to regional grants and incentives for investment and R&D. There are signs of a shift in attention beyond London with the share of investors who say it is the UK’s most attractive destination falling from 46% in 2019 to 25% in 2020.”’
Some 8% of investors surveyed by EY as part of the research said that the East Midlands was the most attractive UK region in which to invest, up from 5% in 2019.
Article from The Business Desk 7.6.21