UK remains the top destination for foreign direct investment in Europe, but challenges mount as Brexit casts a shadow.
The UK remained the number one destination for foreign direct investment (FDI) in Europe in 2018, ahead of Germany and France, with 1,054 projects, its third-highest number of FDI projects in 20 years. However, this was a 13% drop in FDI projects compared to 2017 (1,205 projects) and according to our survey perceptions of the UK as an FDI destination have weakened.
The latest EY UK Attractiveness Survey, which launches today, shows that whilst there is no immediate crisis, the UK needs to take action or risk a further weakening of its position in the coming years.
The report suggests a series of policy steps to help the UK build on its proven strengths as it transitions to life after Brexit.
For the full findings, download our report
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“The UK’s Industrial Strategy provides the framework and opportunity to allocate resources to activities investors identify as priorities such as improving transport infrastructure and skills. This should be supported by moves to incentivise capital investment, reduce the regulatory burden on businesses, and provide more support to foreign investors.”
- The UK remained the number one destination for FDI in Europe in 2018, ahead of Germany and France, with 1,054 projects, its third-highest number of FDI projects in 20 years. However, this was a 13% drop in FDI projects compared to 2017 (1,205 projects).
- Projects in Germany also fell by 13%, largely due to a slump in business services investment. By contrast, projects in France increased by 1%, moving it into second place in Europe above Germany for FDI projects.
- The UK still leads in digital but European share in the sector fell four points to 23% and investor concerns in the manufacturing, HQ, automotive and chemical sectors led to a decline in investment in those areas.
- The UK saw a significant geographical imbalance in 2018, with a relatively strong performance in London and the South East, while the rest of the country saw significant declines.
- According to our perceptions survey, investors in the UK remain committed to their existing operations with only 6% planning to move assets in the next three years.
“While projects in the UK’s 12 core cities fell by 3% in 2018 and by 10% when we exclude London, the decline in the rest of the country was 23%. It appears that uncertainty over Brexit is having a much greater negative impact in the UK’s towns as investors concentrate on what they see as “safer” investments in the larger cities.”
Europe Attractiveness Survey 2019
Foreign direct investment into Europe declined in 2018 – but a strengthened skills base and infrastructure, especially in digital, will keep it ahead of the game.
UK Attractiveness for Financial Services Investors 2019
UK retains top position for financial services investment in Europe, but investor sentiment on its future attractiveness is at a historic low.
Scotland Attractiveness Survey 2019
Scotland retains its position second to London for FDI attractiveness.
Visit our Global Attractiveness hub