It has been reported by GOV UK as per the report UK foreign direct investment, trends and analysis: 2018, that growth in the value of foreign direct investment (FDI) positions held in the UK by overseas investors (FDI liabilities) exceeded that of UK FDI positions held abroad (FDI assets) in 2016.

UK’s Foreign Direct Investment momentum shifts

This resulted in the UK’s net FDI position falling from £50.8 billion in 2015 to £12.5 billion in 2016, the lowest net position since comparable records began in 1997. Figures from the Inward Investment Results 2016-17 report released by the Department for International Trade, declare total FDI projects in the UK rose by two per cent in 2016-17, from 2,213 in 2015-16 to 2,265. This comprises projects by “existing investors” in the UK (1,212) and projects by “new to the UK” investors (1,053). 

Which sectors attract the most investment?

Research by company formation agents, Turner Little, identified the six sectors benefitting from FDI the most.In terms of industry, the research found the UK’s software and computer services sector to be number one for FDI, with 418 projects in 2016-17. This is a substantial number more than the financial services industry with 217 projects and business and consumer services with 211.Closing the top six sectors benefitting from foreign direct investment the most are environment, infrastructure and transportation, with 184 FDI projects in the UK, creative media (151) and advanced engineering and supply chain – with a total 146.The top three sectors with the least FDI projects are Chemicals and Agriculture (50), Extraction Industries (49) and Aerospace (47).

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Where is the investment coming from and where is it going?

Types of foreign direct investment taking place include new investments, which were up by nine per cent, expansions, down by five per cent and mergers and acquisitions (including joint ventures), down by six per cent in 2016-17.The US remains the UK’s largest source of inward investment; providing 557 projects, followed by the rest of Europe, Middle East and Africa, and China and Hong Kong.However, the increase in total FDI projects is not mirrored in total jobs, with roles suffering a –seven per cent fall from 115,974 in 2015-16 to 107,898 in 2016-17, with new roles decreasing from 82,650 in 2015-16 to 75,226 in 2016-17.The table below shows where projects are feeding a healthy workforce by comparing total projects and total new jobs in regions across the UK.Turner Little found that excluding London, the South East (217), West Midlands (151) and the North West (147) hold the highest number of foreign direct investment projects.This equated to 5,432 new jobs in the South East, 6,570 new jobs in the West Midlands and 6,501 new roles in the North West, 2016-17. Showing the importance of FDI in the UK.    

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