US behind third of foreign direct investment projects

Scotland attracted record levels of inward investment last year.

Figures from EY show a marginal rise from 119 to 122 in the number of inward investments north of the border in the last 12 months.

While the rate of growth at 2.5% was significantly lower than the 51% uplift seen in the year previous, EY said it was positive that Scotland had not only held on to the gains that took it to a 10-year high in 2015 but extended them

The accountant found Scotland was the second most attractive target in the UK for inward investment last year, with only London eclipsing its performance.

The US was the primary investor in Scotland with American money behind more than a third of projects.

Second and third spots were taken by France and Germany respectively.

However, it was not all positive, with Scotland’s share of UK foreign direct investment (FDI) projects dropping marginally last year and a significant drop from 45 to 24 in the number of jobs created per project.

The Brexit factor was also noticeable in the figures and EY said the UK now risked losing its position as the top European destination for foreign investment amid concerns flowing from last year’s EU exit vote.

Mark Harvey, EY Senior Partner, Scotland, said: “This positive FDI performance was achieved amid widespread uncertainty, not least the EU referendum vote.

“The results show there were no signs of an immediate collapse in investment and demonstrate Scotland’s ability to attract and secure cross-border investments.

“The decrease in FDI job creation in Scotland could also signal a shift in the labour market away from lower-skilled roles to higher-skilled, such as those required for R&D and software activities, which deliver increased value to the economy.”