- 44 FDI projects recorded in the East of England in 2022, up 10% from 40 in 2021 – second highest total since 2017
- The region achieved its third highest share of all UK projects in the last 10 years
- Digital Technology and Pharmaceutical sectors continue to grow in region, despite digital tech decline nationally
The East of England attracted 44 FDI projects in 2022, an increase of 10% from 2021’s 40 projects. The region’s performance is especially notable given that total UK projects fell 6% from 993 to 929.
Last year’s growth has boosted the region’s share of all UK FDI projects to 4.7%, its third highest market share in the past decade. The region’s top three sectors, Digital Technology, Pharmaceuticals and Business Services, all saw growth in 2022 and made-up 43% of the region’s projects. Some sectors, including Agri-Food and Transportation Manufacturers & Suppliers, saw a fall in the number of projects, while Electronics recorded its first three projects in the region in the last five years.
Meanwhile, significant growth in Research & Development activities was also key to the region’s overall performance. R&D projects in the region doubled from five in 2021 to 10 in 2022.
The East of England ranked ninth for employment within the English regions, with an average 38 jobs associated with each project announcement. By comparison, London projects were linked with an average 32 jobs.
Cambridge continues to be the East of England’s most attractive location for investment, and is the joint 11th best place in the UK for FDI projects (with nine in 2022, alongside Cardiff).
EY’s annual survey of corporate investment decision makers also found that the East of England was viewed as England’s second most attractive place to both invest, beaten by only London. The region was also joint-second in England for planned future projects, behind London and alongside Yorkshire and the Humber.
Stuart Wilkinson, Office Managing Partner at EY in the East of England, said: “The East of England continues to hold steady as one of the most attractive regions to invest in outside of London. The region benefits from its diverse sector make-up, and strengths in key areas such as the pharmaceuticals sector and research and development – and the East of England is seen as one of the most attractive parts of the UK by pharmaceutical investors.
“The pandemic has shown the importance of investment in cutting edge pharmaceuticals and healthcare research, and with an increasing focus on high growth, high value knowledge-based sectors, the forecast looks bright for the region as it continues to attract new investment opportunities.”
UK second in Europe for FDI, while over half the UK sees FDI growth
Nationally, over half of the UK’s nations and regions attracted more Foreign Direct Investment (FDI) projects in 2022 than they did in 2021. The UK hosted 929 FDI-backed projects in 2022, the second highest project total in Europe, albeit down 6% from 993 projects in 2021.
London (299 projects) was still home to the most FDI projects out of any UK nation or region in 2022, but its share of all UK projects has fallen to 32% from a high of 49% in 2019.
Scotland (126 projects), the North West (88) and West Midlands (74) recorded the most projects outside London, while the biggest gains in England from 2021 were seen in the North East (33%), Yorkshire and the Humber (28%) and the East Midlands (23%).
The English regions joining London and the South East in seeing project declines from 2021 were the South West (down 17%) and the West Midlands (down 5%).
The strong results across the North – all three regions saw double-digit growth – were underpinned by resilience in the digital sector and growth across a range of key activities, including manufacturing, sales, research and development, logistics, and headquarters projects.
Meanwhile, declines in the digital sector were the biggest drag on performance for the South of England. Digital projects in London almost halved from 194 in 2021 to 107 in 2022, with significant falls also seen in the South East and South West. Despite this, the UK still led Europe for tech FDI.
Across Europe, France held onto top spot for total project numbers for a fourth consecutive year, although the UK once again ranked highest in Europe for new projects and continued to deliver more total jobs and jobs per project than Germany and France – trends consistent with the UK’s pivot in strategy to focus on value over volume when attracting FDI.
Hywel Ball, EY’s UK Chair, said: “The strong FDI performance of Scotland, Wales and England’s regions in 2022 is a clear success for the UK. Notably, when asked to identify the policy area in which improvements would most increase the UK’s attractiveness, the investors we surveyed were most likely to pick the geographic rebalancing of the UK economy. While London’s attractiveness will endure, despite ups and downs, policymakers need to build on the clear interest in investment outside the capital.”
Image: Stuart Wilkinson, Office Managing Partner at EY in the East of England
