The Midlands delivered a strong Foreign Direct Investment (FDI) performance last year – with both the East and West Midlands FDI-backed projects growing at a faster rate than the rest of the UK.
According to the 2022 EY Attractiveness Survey, the West Midlands hosted 78 FDI projects in 2021, up 27.9 per cent from the 61 projects located in the region in 2020.
The East Midlands hosted 39 projects in 2021, up 2.6 per cent from the 38 projects in 2020 and the same number of projects as 2019. By comparison, UK project numbers grew just 1.8 per cent from 975 in 2020 to 993 in 2021.
Meanwhile, the West Midlands improved on its immediate pre-pandemic performance, with only 64 projects taking place in 2019.
The East Midlands has good reasons for optimism about future growth, with 8.6 per cent of investors surveyed by EY describing it as the most attractive UK region for investment, behind only London (26.9 per cent), Scotland (15.8 per cent) and the South East (9.3 per cent).
The East Midlands’ 2021 project total was above its 10-year average of 34.6 and more than double the 17 projects in the region in 2012.
Leading sectors were transportation and logistics (nine projects), agri-food (seven), and machinery and equipment (seven).
Both transportation and logistics and machinery and equipment projects were at their highest level in the last five years.
Business services (22 projects) were the key activity in the West Midlands, followed by manufacturing (15), which saw its first increase in project numbers since 2017.
In the East Midlands, manufacturing led the way with 12 projects, followed by logistics (11).
Simon O’Neill, office managing partner at EY in the Midlands, said: “The regions’ successes have been built on a diverse mix of sectors, whether it’s digital technology in the West Midlands or logistics in the East Midlands.
“Looking ahead, there are reasons for optimism. Across Europe, there is a swing towards investment in manufacturing, a sector in which the Midlands has historically excelled.
“Combined with the growing importance of ‘cleantech’, the Midlands has an opportunity to establish itself as a European centre for developing and building the green technologies needed for the UK to reach its Net Zero targets.
“Notably, manufacturing projects tend to bring investment to towns rather than cities, which means they can help levelling-up within regions, not just between them.
“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 West and East Midlands build their attractiveness to investors.”
