Foreign investment in region falls by a quarter
FOREIGN investment into the West Midlands fell by almost a quarter in 2019 as the region suffered its lowest number of projects for five years.
There were 64 foreign direct investments (FDIs) into the West Midlands, a drop of 19 compared with 2018, which represented the lowest figure since 2014, according to new research by financial services firm EY.
But its 2020 UK Attractiveness Survey said Birmingham had seen a climb of eight FDIs to 30, making it the second most active city outside of London, with only Manchester registering more with 34 projects. The EY report examines the performance and perceptions of Europe, the UK and its regions as destinations for FDI and this year includes a survey of 800 international investors looking at the impact of Covid-19 on investment.
Coventry also ranked in the top 20 best-performing locations in the UK outside of London with eight projects – enough to put the city in 12th place.
Elsewhere in the region, Solihull and Malvern secured three projects each while Burton-upon-Trent, Hereford, Nuneaton and Telford secured two.
Like all other UK regions, the West Midlands saw the largest proportion of its investment (30 per cent) come from the US. The region also secured 11 per cent of its investment from Germany and three per cent each from India, Japan and China.
Mirroring the UK picture, the digital sector was responsible for the largest number of projects (15) in the West Midlands which EY said was the second highest number of digital projects for the region in the last decade.
The machinery and equipment and transport manufacture sectors were jointly responsible for the second largest number of projects for the region at 13 each.
However, the number of FDI projects in the transport manufacturing sector fell by two when compared to the previous year – the lowest number of projects recorded by the sector since 2012.
EY’s Midlands managing partner Simon O’Neill said: “While it’s great to see Birmingham had a strong year for FDI in 2019, it can’t be ignored that the West Midlands had the largest decline of inward investment compared to any other region. “While manufacturing has always been the backbone of the region, it is clear from analysing foreign investment the region is continuing to grow its strength in digital.
“However, in order to share this success more equally across the region, thought must be given to how locations outside of Birmingham can attract overseas digital investors.”