Business News Round Up (19/06/2023)
Scotland’s foreign direct investment grows again
Scotland outpaced both the UK and Europe on foreign investment – for the second year in a row – by securing a record 126 inward investment projects last year – up 3.3% on 2021’s 122 projects. EY’s latest Scotland Attractiveness Survey showed that the nation also secured a record 13.6% share of UK foreign direct investment (FDI) projects and is polling at record levels of attractiveness to investors as an FDI location outside London. The strong performance is Scotland’s fourth successive annual increase in FDI projects and is set against the background of a 6% decline in total UK projects – from 993 to 929 – and growth of just 1% across Europe. Scotland’s record share of all UK projects is up from 12.3% in 2021, and 11% in 2020. While London remains the UK’s most attractive location to future investors, Scotland is in second place, with 11% of investors rating the country as the most attractive place to establish operations in the UK. This is down from the record high of 15.8% in 2022’s survey but remains higher than 2019’s pre-pandemic score of 7%. Meanwhile, a record high 19.2% of investors – again the highest figure for any UK location outside London – are planning to establish or expand operations in Scotland.
https://www.insider.co.uk/news/scotlands-foreign-direct-investment-grows-30249157
North West manufacturers outlook hampered by lack of industrial strategy as outlook ‘gradually’ improves
The lack of an industrial strategy from central government is hampering anything more than a gradual recovery, according to the director for the North of manufacturing trade body Make UK. The findings in the Make UK/BDO Q2 Manufacturing Outlook survey show strong demand for major new aircraft orders have boosted the aerospace sector, and an easing of chip shortages have helped automotive supply chains. However, Dawn Huntrod, Regional Director for the North at Make UK, said: “Manufacturers in the North West are seeing a gradually improving picture but the word ‘gradually’ is doing a lot of heavy lifting. However, companies are at least seeing a relative period of stability after the political and economic turmoil of the last few years when they have spent most of their time firefighting. Substantial challenges still remain and so long as there is an absence of an overarching industrial strategy growth prospects will remain anaemic at best.” North West manufacturers are seeing an improving economic outlook for the rest of the year as the domestic and global markets have improved, easing fears of a significant recession for industry this year. Both output and orders are forecast to increase significantly in the next quarter to a balance of +17% and +22% respectively, figures that are substantially above long-term historic averages. Both UK and export orders are strong at a balance of +11% and 25% respectively In line with this improving picture job prospects are improving with the balance of companies increasing recruitment in the last three months above the national average at +17%.
US investors find UK less attractive after Brexit
For the third consecutive year, US investors have suggested they are less confident in sinking funds into British operations, according to a new poll. Business leaders identified the country’s increasingly strict immigration system, political instability, and regulatory uncertainty as their top causes for concern. The infamous ‘special relationship’ between the US and the UK was first coined by Winston Churchill during the Second World War, to describe the close allyship and cooperation between the two countries. While many residents of the British isles retain an unshakable belief in the solidity of that relationship, however, a new study suggests that that feeling does not necessarily run both ways – at least when doing business is concerned. Bain & Company polled 79 companies – 56 in the US and 23 in the UK – employing a combined 320,000 people. The transatlantic survey found that British businesses’ confidence in the US was stable at high levels. Asked how they rated their confidence in the US as a place to do business out of 10, British respondents reported an average confidence rating of 8.4. Buoyed by the size of the American market – which is still the largest economy in the world – as well as access to capital and the US workforce’s skills base, UK investors found the US was a more attractive innovation hub than the UK. As a result, about three-quarters of UK respondents said they believed they will increase their investments in the US over the next two to three years.
https://www.consultancy.uk/news/34540/us-investors-find-uk-less-attractive-after-brexit
North West climbs FDI attractiveness rankings
The North West was the UK’s third-best performing region for foreign direct investment (FDI) projects in 2022, up from fifth in 2021, according to a new report by EY.The firm’s latest UK Attractiveness Survey found the North West attracted 88 FDI projects in 2022, up 19 per cent from a total of 74 the year before. Meanwhile, overall, UK projects fell 6 per cent from 993 to 929. Only London (299) and Scotland (126) attracted more FDI projects than the North West in 2022. While the UK as a whole saw projects in digital technology fall by almost a quarter, the North West bucked this trend, with digital technology projects in the region up by 25 per cent year-on-year. The region’s strong performance in 2022 was also underpinned by significant growth in project numbers for the electronics and IT and finance sectors, while sales and business services, manufacturing and research and development were the North West’s most prominent FDI activities. The North West’s share of all UK projects increased to 9.5 per cent, surpassing its recent peak of 8.7 per cent in 2020. Excluding London, Manchester attracted more FDI projects than any other UK city in 2022 with a total of 45, up from 31 in 2021. Meanwhile, Liverpool and Warrington ranked joint-14th for investment outside the capital, attracting seven FDI projects each last year.
https://www.insidermedia.com/news/north-west/north-west-climbs-fdi-attractiveness-rankings