North East sees rise in jobs created through foreign investment projects

The North East saw rising numbers of jobs created through foreign investment last year despite chalking up fewer projects, a new report says.

The latest UK Attractiveness Survey from EY shows the region attracted 38 foreign direct investment (FDI) projects in 2023 – down from 40 in 2022 – but 2,887 jobs were created in the North East through those projects, up 6.8% year-on-year. The FDI projects were predominantly driven by the software and IT services, machinery and equipment, and utility supply sectors, and despite the marginal fall in projects, the 2023 total was still the region’s second-highest projects total since 2017.

Overall, the region ranked sixth in the UK for FDI-related employment, up from ninth the previous year. The North East ranked eighth out of the UK’s 12 regions for attracting FDI projects in 2023, up from ninth in 2022, and the marginal year-on-year fall in FDI projects was in contrast to the UK’s overall total rising by 6% with 985 projects secured across the country.

The North East also attracted 24 new FDI projects last year, up 41.2% from 17 in 2022, which demonstrates its ability to attract fresh investment.

Manufacturing remained the region’s leading investment area with 10 projects, followed by business services with eight, and logistics and sales and marketing, both on six.

Despite the positive signs for the region, only 3% of respondents to EY’s latest UK Attractiveness Survey said they intend to invest in an FDI project in the North East in the next 12 months, making the region the UK’s joint-least attractive for overseas investment, along with the East Midlands.

Michael Scoular, EY’s Newcastle office managing partner, said: “There are grounds for optimism when reflecting on the North East’s inward investment performance.

“The region improved its standing in the UK rankings for FDI performance and secured more investment-related jobs than the previous year.

“The North East remains a strong manufacturing hub and this should continue to make it an alluring investment destination for high-value advanced manufacturing projects in the years ahead.

“However, the decline in North East projects overall, despite the UK’s national total increasing, should not be overlooked. The region will need to play to its strengths, including its strong manufacturing and utilities sectors, in order to build on these results going forward.

“The new government will likely be eager for the UK to attract more investment from these high-value, strategically important sectors in the future, so showcasing the North East’s distinct attributes to a global audience will benefit the rest of the country.

“National policy can only do so much and local government and development bodies have key roles to play here, driving activity in promoting targeted growth initiatives and accelerating growth in locally prioritised sectors.”