However, it also importantly demonstrates a resilient Scotland that remains the most attractive destination in the UK for both existing and new investors after London.
The total number of FDI projects in Scotland was 94, down 19% from 116 the year before. This is a trend seen across the UK, particularly in the regions, and evidences a challenging environment in securing inward investment. In fact, every UK region apart from Northern Ireland attracted fewer projects in 2018 than 2017.
There is clear potential for Scotland to capitalise on its proven strengths; its record for attracting new investment, and the positive perceptions of Scotland as a UK investment destination amongst both established and not established investors, and to consolidate its position as the natural alternative to London. The headwinds facing UK FDI overall make it especially vital that Scotland seizes this opportunity with both hands.
While FDI projects in London held firm in 2018, the decline in projects across most UK regions appeared to reflect the uncertainty surrounding the Brexit process, with 15% of companies in our 2019 survey of international investors saying they have put UK investment plans on hold as a result of the vote to leave the EU.
Despite a fall in the number of projects secured during 2018, Scotland has managed to sustain most of the strong progress made during an unprecedented run of record-breaking success over the last few years.
Many UK regions were dealt the same combination of falling projects and declining UK market share felt by Scotland during 2018. The ‘Northern Powerhouse’ fell more sharply, while the ‘Midlands Engine’ and South East England suffered smaller falls. Scotland retains its position as the second most important ‘region’ for UK investment after London – a position it has held since 2014.