The Department for International Trade has published its annual set of figures outlining the number of foreign direct investment projects currently being operated in the UK. The total of 2,072 projects represents a 9% year on year drop, and whilst the total number of jobs created, 75,968, represents a 1% increase on 2016-17, the number of safeguarded jobs, the DTI reveals, has fallen by 54% to just 15,063.
The projects are divided into those administered by existing investors, 1,250, and those by new investors, 872. The total is less than both 2016-17 and 2015-16, and although the number of new jobs created is more than 2016-17, it is significantly less than 2015-16 and 2014-15, when more than 84k new jobs were created as a result of FDI.
Regionally, London attracted the lion’s share of new overseas projects; 740, with 17,478 jobs created. The figures dwarf all other regions, with the South East, with 294 projects leading to 5,238 new jobs, the next biggest recipient of foreign direct investment. The North East attracted just 69 projects and created 2,379 jobs, whilst Scotland benefitted from 141 projects and 4,148 new jobs.
The importance of foreign direct investment from the US is underlined in the report, with the US responsible for 514 projects, 26,750 new jobs and 3,572 safeguarded jobs, whilst Germany, China and India all contributed between 120-130 projects although German projects led to nearly 10k jobs whilst India and China created just over 2k each.
In terms of industry sectors the Food and Drink and Software and Computer Services sectors both created more than 9,000 jobs, Electronic and Communications more than 8k, and Automotive, Business and Consumer Services and Financial Services more than 7k. The sector creating the most jobs is the Environment, Infrastructure and Transportation sector, creating 11,849 jobs overall.
The figures suggest that the UK is the top destination for inward investment in Europe. Discussing the report, International Trade Secretary Liam Fox commented that:
“Two years since the EU referendum, the UK has record employment and seen an increase in new jobs as a result of inward investment.
“We remain the top destination in Europe and third in the world for foreign direct investment. As an international economic department, we continue to promote the strengths of the UK as a great inward investment destination, with an open, liberal economy, world-class talent and business-friendly environment.”
The Money Cloud View
The UK at the top of the European table for inward investment, and number 3 in the world is good news and it is also encouraging to see that sectors requiring strong technical knowledge and expertise are attracting substantial investment and opportunities for a skilled workforce.
Perhaps the biggest worry, with Brexit just around the corner (barring a last-minute volte-face) is the number of safeguarded jobs, which has fallen by 54% and stands at just over 15k.
It’s clear that these are still challenging and uncertain times for the UK and that the country will be required to demonstrate to all of its foreign customers that business can continue as usual in the aftermath of the divorce from the EU. The financial services sector, in particular, may suffer from its inability to “passport” its services into the EU.
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