The South East recorded a 13.9% increase in Foreign Direct Investment (FDI) projects last year, giving it the fastest rate of growth in the UK.
This is according to the 2022 EY Attractiveness Survey, which reports that 9.3% of investors surveyed described the South East as the most attractive UK region for investment, behind only London at 26.9% and Scotland at 15.8%.
This has manifested as 82 FDI projects in 2021, up 13.9% from the 72 projects located in the region in 2020. These numbers are close to pre-pandemic levels, falling just one short of the 83 which were delivered in 2019. By comparison, the project numbers for the rest of the UK only grew 1.8% from 975 in 2020 to 993 in 2021, and were still 10.5% down on 2019’s 1,109 projects.
Of the region’s major populations hubs, Oxford led the way by securing 12 projects last year compared to 2020’s 4, making it joint 10th of the UK’s leading investment locations outside London. Milton Keynes and Reading, hosting 9 and 8 projects respectively, are also key contributors to the region’s growing appeal. London is still a considerable distance ahead, however, boasting 394 projects in 2021, up from 383 in 2020.
This growth is the result of success in some of the region’s key sectors, with digital technology (28 projects), transport manufacturers and suppliers (14) and agri-food (6) being the major contributors. Furthermore, the effects of these projects tend to be widespread, with projects in the South East having been the most likely to involve business services (24), sales and marketing (23) and Research & Development (17). R&D projects in particular reached their highest recorded level.
Richard Baker, Managing Partner at EY in the South East, comments: “The South East has been a UK FDI success story in 2021, bouncing back from the impact of the pandemic on inward investment and delivering a strong performance in high value sectors like Research & Development and digital technology. The region remains attractive to investors and, with the digital sector set to lead the way for future UK FDI growth, the South East is well positioned.
“One thing which is consistently very clear from investors is that the strength of local business networks matters when they’re choosing where to site their projects within a country. Local skills and infrastructure, support from regional development bodies and access to regional grants are also part of the mix too, reinforcing the importance of devolving power and fostering local ecosystems. Building a unique sense of place from in its economy will help the South East build its attractiveness to investors.”
You can download the report in full here.