There was a 14% decline in the number of foreign investment projects in the UK in 2018-2019, according to a report by the Department for International Trade.
The number of jobs created by foreign investment in the financial year that just ended dropped to 57,625, down 24 percent from 2017/18 – the lowest level in seven years.
Despite the decline in the number of projects, Britain managed to keep its position as the top destination in Europe for foreign direct investment (FDI).
Inward investment stock into the UK by the end of 2018 was worth $1.89 trillion (£1.48 trillion), higher than Germany ($939 billion) and France ($825 billion) combined.
International Trade Secretary, Dr Liam Fox, commented:
“Today’s figures prove the British economy is by far the most attractive place in Europe for foreign direct investment, securing more than the impressive economies of Germany and France combined.
“The UK’s pro-business environment is what makes it 1 of the most prosperous countries in the world to invest in. From our booming tech industry to our world-leading financial services sector, investors from all over the world see Britain as their destination of choice for relocation.
“Despite global headwinds getting stronger, the British economy continues to demonstrate its resilience to operate in an increasingly uncertain global economic environment.”
Has the Brexit vote dented FDI in the UK?
A report by EY earlier this month revealed that while the UK remained the number one European destination for foreign investment in 2018, there was still a 13% drop in FDI projects compared to 2017.
The Top 10 FDI European destination countries:
|Rank||Country||2017||2018||Change 17/18||Market share 2018|
|1||UK||1 205||1 054||-13%||17%|
|2||France||1 019||1 027||1%||16%|
Data source: EY’s Europe Attractiveness Survey 2019
Archer Howard, chief economic adviser at EY Item Club, a consultancy, was quoted by the FT as saying that “foreign companies have become more cautious about investing in the UK due to Brexit uncertainties”.
“This may have led to the significant delaying of investment projects, at the very least, if not outright cancellation,” he added.
Top executives have a gloomy outlook for the future of the UK’s attractiveness for investment
EY’s latest perception survey revealed that 42% of investors expect the UK’s attractiveness for FDI to decline over the coming three years, while only 26% expect it to improve. Access to the EU, tariffs and customs were the standout issues for investors.
“The main concerns investors have over the UK’s future prospects are loss of access to EU markets and restrictions on labour mobility,” EY said.