UK ranks second in Europe for foreign direct investment
The UK is ranked second in Europe for total inbound foreign direct investment (FDI), and is still expanding its share of the market.
In 2020 the UK secured 975 projects from FDI, down 12 per cent from 2019’s 1,109 despite the pandemic, according to data from EY.
France narrowly outranked the UK, securing 985 projects, while Germany came in third among Europe, securing 930 projects.
Overall, Europe saw a 13 per cent fall in profits – from 6,412 in 2019 to 5,578 in 2020 – which helped the UK expand its market share of FDI for the second successive year, while London reclaimed its status as Europe’s most attractive city for investment, overtaking Paris.
The UK’s performance was partly based on its success in attracting investment in digital technology projects, which have accounted for the largest share of inbound FDI projects in the UK every year since 2013.
There were 322 digital technology FDI projects in the UK in 2020 – a third of all UK projects – marking the UK as Europe’s leading destination for digital tech investment.
Alison Kay, managing partner for client services at EY UK & Ireland, said: “Given the impact of the pandemic, a shrinking FDI market, and the then-uncertain future trading relationship with the EU, the UK delivered a positive FDI performance in 2020.
“A relatively small decline in project numbers meant the UK far-outpaced downbeat investor forecasts too.”
However, she said the UK had some catching up to do elsewhere, particularly in areas like clean technology, where the UK trails Europe.