Overseas Investment in West Midlands Soars, But Other Regions Lag Behind

By Anushka Malhotra

1 minute 42 seconds

Investment

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Quick Read: Overseas investment in the West Midlands soared by 72 percent in 2023, creating nearly 7,000 jobs, while other UK regions, especially the north, faced declines.

Overseas investment into the UK rose in 2023, according to new EY research, but the national increase obscured deep regional imbalances. The West Midlands recorded a 72 percent increase in overseas investment projects last year, creating almost 7,000 jobs. The region, which includes cities like Birmingham, Coventry, and Wolverhampton, received 172 projects, second only to London in the number of projects and jobs created.

"The West Midlands' UK-leading FDI figures are testament to the strength of our frontier technologies and our talented workforce"

said Richard Parker, Mayor of the West Midlands.

Given the number of jobs created through overseas investment, Parker emphasised the importance of ensuring that the region's skill base matches global demand.

Greater London also saw growth, recording a 20 percent increase in FDI projects, driven primarily by the tech and financial services sectors. Scotland experienced a 14 percent increase in investment projects, bringing its annual total to 142, the highest on record. This increase was largely due to a rise in renewable energy investments.

However, regions across the north of England faced challenges. FDI projects fell by 22 percent, with Manchester suffering the most. Having been the top spot for international investors outside London in 2022, Manchester fell behind Birmingham and Edinburgh last year after FDI projects dropped by 31 percent. Yorkshire and the North West recorded their lowest levels of FDI projects since 2014.

"Last year proved challenging for the North West, and Manchester slipped down the rankings after a drop in investment numbers,"

commented Peter Arnold, EY UK Chief Economist.

The UK economy has consistently been held back by regional imbalances. In her Mais lecture, Chancellor Rachel Reeves noted that productivity lagged the national average in all of England's largest cities.

Arnold highlighted that improving the attractiveness of the UK's regions could be a crucial driver of investment and growth in the coming years. The EY survey indicated that the most important factors for investors considering regional investments outside London were access to regional grants and the skills of the local workforce.

"The diversity of sectors outside the capital could become a significant asset for the UK if it plays to its regional strengths,"

Arnold said.

"Manufacturing and utility supply are key sectors in Scotland, the North, and the Midlands. With targeted strategic investment and support, these areas have the potential to emerge as vital hubs for the innovation and implementation of sustainable technologies, driving the nation's progress in the clean tech arena."

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