Foreign Direct Investment projects in Yorkshire fall by one-third, EY report reveals

This was in contrast to the national figures, which indicated a 6 per cent increase in total FDI projects across the UK in 2023.

Nationally, Greater London, Scotland, the West Midlands and the South West saw FDI project numbers increase but declines were also recorded in Wales, Northern Ireland and the East Midlands.

Regions across the North of England as a whole recorded a 22 per cent fall in FDI projects in 2023.

Yorkshire and Humber also saw a year-on-year fall in the number of jobs created as a result of FDI projects, from 4,564 in 2022 to 1,993 in 2023.

However, the performance of Leeds remained resilient – with its FDI projects increasing from 15 to 16. It meant Leeds is ranked as the UK’s seventh-best performing city outside of London for attracting FDI projects.

Tim West, Leeds Office Managing Partner at EY, said the new Labour Government has the chance to help the Yorkshire-wide figures improve.

"Looking ahead, national and local policymakers will need to consider how Yorkshire and the Humber can capitalise on the UK’s position as one of the most attractive European countries for FDI,” he said.

"The region enjoys particular strengths, including its manufacturing capabilities and its appeal as a destination for energy investment. The new government has the opportunity to showcase these attributes to a global audience of investors, ensuring that Yorkshire and the Humber continues to attract high-value manufacturing and renewable energy projects to the UK.”

The EY report said the utility supply sector was Yorkshire’s biggest driver of FDI projects last year with nine. That was up from six in 2022 – an increase attributed to strong performance in renewable investment projects, including offshore wind.

Meanwhile, the Chemicals and Plastic sector was the second-most prominent for attracting FDI in the region, with a total of four projects.

Manufacturing remains the region’s leading investment area, with a total of nine projects. This was followed by Business Services with eight projects and Sales and Marketing with six projects.

Yorkshire and the Humber was also ranked as England’s joint-fourth most popular region for future planned investment, alongside the East of England.

Ten per cent of investment decision-makers surveyed by EY said that they plan to expand or establish operations in the region within the next 12 months, up from 6 per cent in last year’s survey. Greater London was the leading UK region for future investment with 52 per cent of respondents intending to invest there within the next year.

Mr West said: “It’s encouraging to see that Leeds remains one of the UK’s top ten cities for attracting FDI and that the wider Yorkshire and the Humber region continues to be an attractive destination for utilities investment. Nationally, the UK recorded a rise in renewable energy investments last year and the Yorkshire and the Humber region was certainly a beneficiary of this, becoming the UK’s third most popular area for utility investment projects behind Greater London and Scotland.”