Leeds was ranked the UK’s seventh-best performing city outside of London for attracting Foreign Direct Investment (FDI) projects in 2023 with a total of 16 projects, up from 15 in 2022, according to EY’s latest UK Attractiveness Survey.
Meanwhile, the Yorkshire and the Humber region secured 34 FDI projects in 2023, down from a total of 51 in 2022. This was in contrast to the national figures, which indicated a 6% increase in total FDI projects across the UK in 2023.
The region also saw a year-on-year fall in the number of jobs created as a result of FDI projects, from 4,564 in 2022 to 1,993 in 2023.
Future FDI prospects appear bright despite decline in 2023
The Utility Supply sector was Yorkshire and the Humber’s biggest driver of FDI projects last year, with a total of nine, up from six in 2022. This was largely due to a strong performance in renewable investment projects, including offshore wind.
Meanwhile, the Chemicals and Plastic sector was the second-most prominent for attracting FDI in the region, with a total of four projects.
When examining the type of FDI activity Yorkshire and the Humber secured in 2023, Manufacturing remains the region’s leading investment area, with a total of 9 projects. This was followed by Business Services (8 projects) and Sales and Marketing (6 projects).
Yorkshire and the Humber was also ranked as England’s joint-fourth most popular region for future planned investment (alongside the East of England). Ten per cent of investment decisionmakers surveyed by EY said that they plan to expand or establish operations in the region within the next 12 months, up from 6% in last year’s survey. Greater London was the leading UK region for future investment with 52% of respondents intending to invest there within the next year.
Tim West, Leeds office managing partner at EY, said: “It’s encouraging to see that Leeds remains one of the UK’s top ten cities for attracting FDI and that the wider Yorkshire and the Humber region continues to be an attractive destination for utilities investment. Nationally, the UK recorded a rise in renewable energy investments last year and the Yorkshire and the Humber region was certainly a beneficiary of this, becoming the UK’s third most popular area for utility investment projects behind Greater London and Scotland.
“However, as was the case for regions across the North of England, Yorkshire and the Humber attracted fewer overall FDI projects last year than in 2022, despite the UK’s national total rising year-on-year. Looking ahead, national and local policymakers will need to consider how Yorkshire and the Humber can capitalise on the UK’s position as one of the most attractive European countries for FDI. The region enjoys particular strengths, including its manufacturing capabilities and its appeal as a destination for energy investment. The new government has the opportunity to showcase these attributes to a global audience of investors, ensuring that Yorkshire and the Humber continues to attract high-value manufacturing and renewable energy projects to the UK.”
UK’s regional FDI gap widens
Greater London, Scotland, the West Midlands and the South West were the only UK regions to see FDI project numbers increase in 2023. Project numbers in the South East (67) and the East of England (44) were consistent with the previous year, while every other region and devolved administration in the UK saw a decline.
The biggest declines were seen in Wales, Northern Ireland and the East Midlands. Wales saw FDI projects fall by 52%, while Northern Ireland recorded a drop of 35%. The East Midlands recorded 31 FDI projects in 2023, down 35% from the year before.
Regions across the North of England as a whole recorded a 22% fall in FDI projects in 2023. The North West and the North East saw project numbers decline by 23% and 5% respectively.
