• The West Midlands was Europe’s seventh best performing region for FDI, securing 127 projects in 2023, 72% higher than in 2022
  • Birmingham named most successful city outside of London for FDI, securing 67 projects – the city’s highest FDI project total in a decade
  • UK recorded 985 FDI projects in 2023, up 6% from 2022

The West Midlands attracted 127 Foreign Direct Investment (FDI) projects in 2023, its highest total of the last decade, according to the latest EY UK Attractiveness Survey.

The West Midlands’ 2023 project total was 72% higher than in 2022 and raised the region’s share of all UK projects to a decade-high 12.9%.

Birmingham was at the forefront of this growth, leading the West Midlands and outperforming all other UK cities outside of London. The city recorded 67 FDI projects in 2023, setting a record for the highest number of projects managed by any city outside the capital in the last ten years.

The West Midlands also recorded an increase in employment associated with FDI projects, up 9.2% to 6,784 – the region’s highest recorded total since 2017.

Technology leads growth for the West Midlands

The Software and IT Services sectors have been a significant driving force behind the West Midlands’ FDI success, contributing 38 projects – the sector’s highest project total in the region since 2017. Transportation Manufacture and Supplies, along with Machinery and Equipment, also saw substantial investment, recording more projects in 2023 than the average for the decade, with 18 and 13 projects respectively.

Simon O’Neill, Office Managing Partner for EY in the Midlands, said:

The West Midlands recorded a meteoric rise in inward investment last year, a clear indicator of the region’s strong economic potential and its growing appeal to international capital. Birmingham’s exceptional performance, leading the charge with 67 projects, exemplifies the city’s strategic position as a hub for innovation and business growth. While we celebrate these successes, we remain committed to understanding the challenges faced by the East Midlands and to supporting its efforts to regain momentum in attracting global investment. The West Midlands’ success story is not only a win for the region but also a significant contribution to the UK’s position as a prime destination for foreign investment.”

Neil Rami, Chief Executive of the West Midlands Growth Company (WMGC) – the region’s official investment promotion agency – said:

These figures reinforce the West Midlands as a strategic necessity to inbound investment. Despite challenging macro-economic conditions, the region has bucked a trend of decline, witnessing UK-leading, and record-smashing growth in FDI. This success can be attributed to the strong economic fundamentals of the region; our talentpool, innovation-led R&D and business ecosystem form an attractive proposition to investors. Critically, WMGC’s Global Growth Programme, intensive international relations and targeted marketing helped convert this interest into tangible investment – from which thousands of new jobs have been created.”

UK’s regional FDI gap widens

Greater London, Scotland, the West Midlands and the South West were the only UK regions to see FDI project numbers increase in 2023. Project numbers in the South East (67) and the East of England (44) were consistent with the previous year, while every other region and devolved administration in the UK saw a decline.

Richard Parker, Mayor of the West Midlands and WMCA Chair, said:

The West Midlands’ UK-leading FDI figures are testament to the strength of our frontier technologies and our talented workforce. Critically, through this investment, thousands of new jobs are being created for local people across the breadth of the region. It is therefore incumbent upon us – and a priority of mine – to ensure the region’s skill-base continues to match global demand, in order to maintain our leading-edge. I have no doubt that the West Midlands is the country’s best place to do business, and look forward to supporting these companies as they become part of the region’s economic success story.”

The biggest declines were seen in Wales and Northern Ireland. Wales saw FDI projects fall by 52%, while Northern Ireland recorded a drop of 35%.

The North of England as a whole recorded a 22% fall in FDI projects in 2023. The North West, Yorkshire and the Humber, and the North East saw project numbers decline by 23%, 33% and 5% respectively.

Edinburgh retained its position as the UK’s second best performing city for FDI outside of London, despite project numbers falling by 20% year-on-year to 32.

Projects into Manchester declined by 31%, falling from 45 in 2022 to 31 in 2023. This means that Manchester is now the third highest ranked UK city for FDI – down from first place in 2022 and its lowest ranking of the past decade.

Glasgow (fourth), Bristol (fifth), Cambridge (sixth) and Leeds (seventh) all saw increases in the number of FDI projects secured in 2023, with Cambridge recording a decade high.