It shows the UK has been able to rebalance its investments to compensate for a decline in EU originated projects, further illustrating the transition underway in the UK economy.
Meanwhile, investors appear less likely to regard ‘Brexit’ as a risk factor, with just 24% of survey respondents citing it as a risk factor this year, compared to 38% last year.
The number of EU-originated FDI projects in the UK continued to decline to 340 in 2019, albeit at a slower pace than before, and is now 17% below its 2016 peak. As the EU’s share of total FDI projects in the UK falls, other countries have filled the gap. US FDI projects in the UK have increased to 376 (up 9% from the previous year), surpassing the highest ever total from the EU (340 in 2016). Meanwhile investment from countries like Turkey and Israel has grown rapidly, by 350% and 143% respectively.
The five largest contributors of investment projects for Scotland in 2019 were the US, France, Germany, Japan and Norway. The US extended its lead as the biggest single source of FDI, accounting for 35% of inward investment into Scotland (an increase of 1% from 2018). Investment into Scotland from France increased in 2019 to secure second largest share of FDI with 9% while across the UK French originated investment was down slightly. Germany, Japan and Norway complete the top five origins of FDI into Scotland with each accounting for 7% of the total.
Scotland snared the majority of projects from Norway (seven of 15), which signals the existing strength between the two North Sea nations and presents avenue of opportunity for further growth outside the EU beyond Brexit.
For the first time Russia entered the top ten sources of FDI projects for Scotland, this reflected an increase in the number of Russian FDI projects across the UK.