The East of England recorded 33 foreign direct investment (FDI) projects in 2014, which is up on the number of projects recorded in 2013 (30) and represents the strongest performance seen in the region since 2009.
East of England sees strongest FDI performance for five years
According to EY’s 2014 UK Attractiveness Survey, the region secured 3.7% of all UK FDI projects, maintaining its share from the previous year. Cambridge secured five projects in 2014, making it the 16th most successful city in the UK for attracting inward investment.
The East of England has been the 6th best performing area of the UK for the attraction of FDI over the last decade. But in 2014, the East of England only out-performed three regions (North East, East Midlands and South West).
However the picture is less rosy when it comes to job creation. In 2014 the employment secured from FDI in the East of England (741 jobs) was down 40% (from 1,230 in 2013) and represented the second lowest total in the last decade. On average, the East of England secures 1,150 jobs per annum from FDI and as a result the 2014 figure is significantly below trend. This meant that the East of England was the worst performing region in terms of employment creation from FDI in 2014.
Cathy Taylor, senior partner at EY in Cambridge, comments: “2014 has been another year of sustained growth for the East of England, demonstrated by the strongest FDI performance seen in the region for five years.
“Although job creation was down in 2014, the region has been the 6th best performing area of the UK for the attraction of FDI over the last decade and demonstrates that global investors continue to see Cambridge and the wider East region as an attractive destination for foreign investment.”
Investment led by the US
Like many other areas of the UK, the US was the most important source of FDI success for the East of England. In 2014, the region secured 42% of its investment from the US and with 14 investments, this was the second most successful year for US investment since 2009.
The East of England gains a higher proportion of its investment from Germany, Netherlands and Scandinavia than the UK as a whole – and a similar proportion of Chinese projects to the UK average.
Mix of sectors key to success
The most important sectors in generating FDI in the East of England in 2014 were software, pharmaceuticals, automotive and other transport services. Each of these sectors recorded three projects, demonstrating that there is no one particularly dominant sector for FDI into the East of England.
This diverse sector mix of projects is demonstrated by the region’s five largest projects in employment terms. The projects included General Motors in the automotive sector, an Ikea business services project, an R&D centre for Hexcel, a utility supply project (Burmeister & Wain) and a distribution centre for DPD.
The UK picture
The UK retained its position as Europe’s number one destination for inward investment, recording 887 foreign direct investment projects (FDI) in 2014 – the largest number ever secured in more than a decade – representing an increase of 11% on 2013 figures.
This record performance by the UK was achieved against a 10% rise in the total number of projects across Europe, which attracted 4,341 investments, another personal best. The UK increased its market share of all European projects last year to 20.4%, its highest level since 2009, pulling away from Germany – the second most attractive destination for FDI in Europe.
Although London remains the single most important location for FDI in the UK, attracting 381 projects last year, 2014 saw a resurgence of the English regions as FDI destinations.
The regional winners in 2014 were Yorkshire with a 140% increase in projects, South East England (up 49%) and the West Midlands (up 38%). Scotland was the second most attractive location in the UK for global investors to London, recording 80 projects.
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