Foreign direct investment on the rise in Yorkshire, according to EY study

Yorkshire and the Humberside recorded more foreign direct investment (FDI) projects in 2016 – at 98 – than in any year since 1997, according to the EY UK Attractiveness Survey.

2016 saw an increase of 24% in projects compared to 2015.

Last year’s FDI projects were also spread more widely across the whole of Yorkshire rather than in just one city region, bringing growth and jobs across the whole region.

South Yorkshire in particular attracted a strong level of FDI projects, with eight locating in Barnsley and six in Rotherham. In West Yorkshire, Leeds secured twelve projects and Bradford six. North Yorkshire attracted eleven projects and the Humberside area eight.

Manufacturing projects led the surge in investment in the region in 2016, making up 57% of all projects, followed by Financial & Business Services (15%) and Retail & Hospitality (10%).

The majority of investment in the region originated from the European Economic Area (EEA) with 52 projects, followed by North America (NAFTA) with 30 projects.

As for individual countries, the USA was the biggest investor in Yorkshire and the Humber region with 30 projects, followed by Germany with ten, France with nine and Austria, Ireland and the Netherlands each investing in five projects. In all, FDI was generated from 25 different countries.

Suzanne Robinson, Yorkshire & Humber senior partner at EY, said: “The work that has taken place to position the whole of Yorkshire & Humberside as a strong investment location in the global marketplace is starting to pay off.

“These figures show that the international investment community has seen the potential in the region, with its access to the right skills, infrastructure and strong supply chain networks.

“Manufacturing in particular has seen strong growth in this region. This is not just from factories, the Yorkshire and Humber region attracted four HQs, four logistics facilities, three testing centres and two training centres in 2016, demonstrating the strength and diversity of skills available in this region to foreign investors.

“However looking beyond manufacturing, the number of software projects in this region fell from six to two, and research and development (R&D) projects fell from five to just one, which clearly defines a need to focus more resources in these areas in the future.”

In addition, 51% of all FDI projects in Yorkshire and the Humber were announced before the EU Referendum vote in June 2016, with 49% announced after this date.

Mark Gregory, EY’s chief economist, added: “The research suggests that the EU Referendum vote and its aftermath may be having an influence on global perceptions of the UK’s medium to long-term attractiveness. Western European investors are twice as negative as Asian and North American investors.

“Decisions on the majority of investments made in 2016 would have been made up to three years ago, which helps to explain Yorkshire’s – and the wider UK’s – solid performance last year, but signs of a slowdown are on the horizon.”

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