London was the leading recipient of foreign direct investment (FDI) projects for the financial year 2022–23 among UK regions, but the highest growth came from the West Midlands, buoyed by its successful hosting of the Commonwealth Games.
London attracted 528 FDI projects in 2022–23, creating 20,647 jobs, according to data from the UK Department for Business and Trade. This was an increase on 2021–22 figures, which saw 444 projects and 18,125 jobs created. The West Midlands saw the most impressive growth, however, going from 143 projects in 2021–22 to 181 in 2022–23, with jobs created increasing from 5,571 to 8,252, a rise of 48.1%.
Scotland also saw its number of FDI projects rise, from 119 to 130. Meanwhile, the South East experienced a dip of 12.8%, from 149 projects attracted in 2021–22 to 130 in 2022–23. The North West, which hosts major cities such as Manchester and Liverpool, was another region to experience a dip in projects from 145 to 137, although it did see a 6.2% rise in jobs created.
Further down the list, other big winners were Yorkshire and the Humber, which contains major urban areas such as Leeds, Bradford, Sheffield and Hull, which saw jobs created increase by 97.4% from 3,738 to 7,378, and the South West – home to Bristol – which saw jobs created rise from 2,533 to 3,908.
In total across the 2022–23 period, the UK attracted 1,654 projects, up 4% on 2021–22, but job creation was down 6.1% from a respective 84,759 to 79,549.
What was behind the West Midlands rise in FDI projects and jobs?
The West Midlands, which includes within its boundaries major cities such as Birmingham, Coventry and Wolverhampton, was given devolved powers as a result of hosting the Commonwealth Games in 2022, to run its own economic legacy programme. Many within the region are attributing these twin causes to its increasing FDI attractiveness.
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Andy Street, the mayor of the West Midlands, said: “Not only does this mean that our industrial heritage, entrepreneurial culture, world-class universities and a broad and deep talent pool is setting the West Midlands apart in the eyes of overseas investors, but it also means thousands of quality jobs are being created right here for local people.
“There could not be a greater vote of confidence in the region than investors putting their money on the table in the way they have this past year, but it is critical now that we keep up this momentum and continue to build on the global platform that the Commonwealth Games gave us.”
This note of optimism was added to by Matt Hammond, chair of the West Midlands Growth Company, who said: “Despite the wave of shocks that have faced the global economy over the past year, these latest FDI figures are a reminder that investment appetite in the West Midlands remains extremely strong. It shows the mileage and impact of the West Midlands on the world stage when the right interventions – such as the Business and Tourism Programme [BATP] – are in place.
“The West Midlands’ impressive figures buck the national trend of declining jobs and outstrip all of the UK when it comes to FDI job growth – including London."
The BATP was established to boost the economic impact of the Commonwealth Games and has played a prominent role in enhancing the region’s inward investment performance. Over the past year, BATP-led trade and investment missions to India, Australia, Malaysia, Singapore and the US have enabled the region to strengthen existing trade ties and reach into new markets to increase its inward investment pipeline. Indeed, over the past 12 months, India has overtaken the US to become the West Midlands’ leading source of FDI, with tech-led investments into the region representing a prominent trend.