The region has matched its pre-pandemic levels of Foreign Direct Investment (FDI), with 40 projects hosted in the region in 2021. This is the same number of FDI-backed projects delivered in 2019, according to the EY 2022 UK Attractiveness Survey.
Despite a decline from a stand-out 54 projects in 2020, the East of England’s 2021 project total was above its 10-year average of 33.6, more than triple the 11 projects in 2012, and still the 3rd highest number of projects in the region in the last decade.
Across the region, the key sectors were agri-food (seven projects), health, life sciences and social work (seven) and transportation manufacturers and suppliers (seven). The digital sector, which was the leading sector for investment into the East of England in three of the last five years, had only six projects in 2021, down from 12 in 2020.
Business services (nine projects) were the key activity in the East of England, followed by manufacturing (eight), which saw its first increase in project numbers since 2017, and headquarters projects (eight) which recorded its highest number of projects in the decade. Last year’s leading activity, logistics, fell from 15 projects in 2020 to four last year.
The East of England secured the joint seventh highest number of projects in the UK in 2020, ahead of the East Midlands (39), Northern Ireland (35), the North East (30) and Wales (17). The region had a 4.4% share of all UK projects, up from its pre-pandemic share in 2019 (3.6%).
Stuart Wilkinson, Office Managing Partner at the regional EY, said: “The East of England has proved resilient from an FDI perspective over the course of the pandemic. While 2021 didn’t reach the heights of 2020, FDI in the region has held at pre-pandemic levels and is still historically high. Some of the decline from last year may be down to a decline in digital projects and additional, one-off logistics activity taking place last year as companies responded to the impact of the pandemic.
“The region has a diverse mix of sectors driving growth and has had some success in attracting high value projects: manufacturing in the region has held steady, pharmaceuticals projects are up and headquarters projects have seen impressive growth in recent years. High value projects mean more jobs and more investment in the region.
“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 East of England build its attractiveness to investors.”
The leading location for FDI in the East of England was Cambridge (joint 8th largest non-London city), which recorded 14 projects, up from 12, while Peterborough also ranked in the top 20 (joint 19th) with 5 projects, down from 10. London attracted the most projects in the country with 394, up from 383 in 2020.
UK retains second place in Europe for investment
EY’s report also reveals that the UK has retained second place in its annual ranking of European countries by their ability to attract FDI projects, with investment activity in Europe and the UK beginning its recovery from the pandemic. France held top spot for project numbers for the third year running, although the UK came first in Europe for new projects and led France and Germany on jobs per project.
Read more about the opportunities and challenges ahead in the full report here.