During 2021, the high levels of Foreign Direct Investment (FDI) within the North West dropped to 7.5% from a previous high of 8.7%. However, Manchester has proven once again it’s ability to remain an investment hotspot.
Foreign Direct Investments are substantial investments made by a company into a foreign market. The UK has become an attractive place for FDI due to the low interest rates available, meaning the business market has become more and more favourable to FDI, and one of the most accepting within Europe.
It has been explained that the reasons for the recent investment shortfalls are mixed. Whilst sales and marketing projects are seemingly on the decline, significant gains can still be seen within leading industry sectors- however, this is outweighed by further declines in several smaller sectors, which end up averaging the number of FDIs downwards.
Stephen Church, North Market Leader and Manchester office managing partner, has explained, “The North West – and the North as a whole – had a challenging year for FDI in 2021. But beyond the headline figures, there are reasons to be optimistic.”
The reasons for being optimistic are simple, whilst the headlines show a decline, the overall average for FDIs within the Northwest are higher than that of 2019. This showcases that whilst2021 has trended down, 2022 is still on track to beat the previous year.
Church continues, "Positively, the North West has held onto the FDI gains it made prior to the pandemic, and a decline on 2020 needs to be seen in that context. There’s a track record of FDI success for the North West to build on, and the impact of the pandemic has added some volatility to FDI numbers.”
Church explains that building local infrastructure is the most important aspect to focus on in the future. Local skills and infrastructure help reinforce the importance of devolving power and fostering local ecosystems in its place instead. The opportunity to create a unique personality for the city will gather interest from FDI investors.
Fortunately, Manchester has been creating a unique ecosystem for some time with investments in net zero solutions and cycle feasibility schemes and this can be seen to continue with the recognition provided by interested FDI investors.