Cambridge doubles its foreign direct investment projects in 12 months


11-06-2018

Cambridge recorded 14 foreign direct investment (FDI) projects in 2017, doubling the amount of investment recorded in 2016 (7). The city’s performance propelled Cambridge into joint 8th position in the list of top 20 UK locations for attracting inward investment.

  • East of England attracted 59 foreign direct investment (FDI) projects in 2017 – a 48% increase on 2016.
  • The number of jobs created by investments in the East of England declined by 4%, but over 2,800 jobs is still a substantial figure compared to results in recentyears.

The East of England recorded its highest ever number of projects in 2017 – up from 40 to 59 –increasing the number of projects secured every year since 2014. The region ranked 7th out of 12 UK regions – an improvement from 9th in 2016.

According to EY’s 2018 UK Attractiveness Survey, the main drivers of regional growth in England were that the three southernmost regions all posted double digit growth. The South East achieved a 26% increase to 91 projects, the South West grew by 39% to 53 investments and the East outshone them both securing 59 projects in 2017, which represented a 48% increase on 2016.

Despite the region’s outstanding performance in attracting FDI, the number of jobs created in the East of England by overseas investors decreased by 4% – from 2,953 in 2016 to 2,835 in 2017 – although still regarded as a substantial level of new employment compared to previous years.

Investment led by digital sector

The number one leading sector for FDI in the East of England in 2017 was digital – overtaking business services. The number of digital projects increased from three recorded projects in 2016 to 15 in 2017. Digital projects represented a quarter (25%) of all inward investment locating into the East of England in 2017.

The sectors with the second and third highest number of projects locating in the region were pharmaceuticals and agri-food. Both recorded four projects in 2016 – and in 2017 pharmaceuticals increased by 125% to nine projects; agri-food by 33% to six projects.

The wholesale, retail and distribution sector provided two of the largest investments – both from Germany – in Peterborough and Bedford, creating 900 jobs in total.

Investment is great news for the East 

Nick Gomer, Managing Partner at EY in the East (pictured), said: “These figures are great news for the East – not only has Cambridge doubled the number of FDI projects, but the East region has attracted 48% more investment than in 2016. Furthermore, while Peterborough and Bedford did not make the top 20 ranking in terms of volume of investment deals, they too have seen sizeable and significant investment, winning projects that have resulted in hundreds of jobs for the local area.

“The fact that 25% of investments came from the digital sector does not surprise me, given it is a particular strength for the East. The region’s outstanding performance in 2017 gives us solid foundations as we continue to work towards rebalancing the UK economy, however, it remains crucial that we find ways to share the benefits of FDI more evenly across the country.”

UK retains its position as the most attractive location in Europe

The UK remains the number one destination for FDI in Europe, ahead of Germany and France, despite a decline in sentiment from foreign investors towards the UK as a place to invest. The UK attracted 1,205 FDI projects in 2017, a 6% increase when compared to 2016 (1,138).

Investors expressed clear concerns surrounding Brexit, which contributed to the UK’s waning attractiveness and a decline in FDI projects in certain sectors, including, financial services, business services and logistics. A 22% increase in digital investments into the UK helped to cushion the hit and push the UK into growth territory.

According to the report, there was a marked increase in UK outbound investment by 35% in 2017 to a new high. 110 of those investments went into Germany and 79 to France, as UK businesses appear to be accelerating their activity to position themselves for a post Brexit environment.

Digital drive to focus future competitiveness post-Brexit

Nick Gomer concludes: “The UK’s FDI performance shows an economy in transition, influenced by Brexit and the force of technological change. In 2017 a swell of digital projects flowed into Europe, changing the shape of FDI and bringing new dynamic businesses to the continent. Digital projects increased by 33% across Europe – three times the rate of overall market growth – and quadrupled in the East, but only increased by 22% across the UK as a whole.

“At a time when investor sentiment towards the UK as an attractive destination is weakening, opportunity arises in the shape of digital. An urgent digital drive is needed with a renewed focus on digital skills, infrastructure, and investment in research and development will help to shape the UK as an attractive environment, to maintain its competitiveness in a post-Brexit world."

 

EY’s 2018 UK Attractiveness Survey – regional results

Performance of the UK regions in securing FDI projects, 2016–17

 

UK Region

2017 Projects

2016 Projects

% Change 2016–17

Greater London

459

446

2.9%

Scotland

116

108

7.4%

North West England

105

90

17%

West Midlands*

97

93

4.3%

South East England

91

72

26%

Yorkshire and the Humber

82

80

2.5%

East of England

59

40

48%

South West England

53

38

39%

North East England

48

52

-8%

East Midlands*

43

37

16%

Wales

33

40

-17.5%

Northern Ireland

19

42

-54.8%

UK

1,205

1,138

6%

*In the Midlands, East and West Midlands have been consolidated, making 140 projects from the Midlands Engine region (up from 130 in 2016).

 

Top 20 UK cities/towns for FDI in 2016 and 2017

 

Ranking

UK City/Town

2017 Projects

2016 Projects

% Change 2016–17

1

London

459

439

4.5%

2

Manchester

45

44

2.3%

3

Edinburgh

29

20

45%

4

Birmingham

21

32

-34%

5

Leeds

19

16

18.8%%

6=

Coventry

16

10

60%

6=

Glasgow

16

27

-40.7%

8=

Cambridge

14

7

100%

8=

Aberdeen

14

16

-12.5%

8=

Oxford

14

8

75%

11=

Bristol

13

14

-7.1%

11=

Newcastle upon Tyne

13

15

-13.3%

13=

Barnsley

10

11

-9.1%

13=

Belfast

10

29

-65.5%

13=

Reading

10

9

11.1%

13=

Warrington

10

2

400%

17

Liverpool

9

10

-10%

18=

Gateshead

7

8

-12.5%

18=

Solihull

7

5

40%

20=

Doncaster

6

6

0%

20=

Hull

6

1

500%

20=

Livingston

6

2

200%

20=

Nottingham

6

1

500%

20=

Salford

6

10

-40%

20=

Sheffield

6

3

100%

20=

Sunderland

6

4

50%

 

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