By Daniel Hunter
The West Midlands is the destination of choice for one in ten global investors looking to invest in the UK in 2013, according to a survey of spending intentions by Ernst & Young.
The analysis by Ernst & Young of the attitudes of 500 international decision makers found that automotive and energy companies were especially keen on the region as a bet for 2013, but that more needs to be done to build a brand for foreign direct investment.
The region is the preferred UK choice for 10% of investors for 2013, behind only London and the South East, but ahead of the North East England, (9%) East Midlands, (9%) North West, (7%) South West (7%) Scotland, (5%) in Wales, (4%) in Yorkshire and 2% in the East of England.
However the survey reveals that 42% of investors say they lack the knowledge needed to choose a specific location in the UK, suggesting more needs to be done to market regions.
Ernst & Young’s UK Attractiveness Survey earlier this year revealed that there were 58 new foreign direct investment (FDI) projects in the region in 2011 compared to 91 the previous year, but these created 6,738 jobs, almost 3,000 more than 2010.
“The Midlands has some outstanding capabilities such as the Manufacturing Technology Centre which is an unparalleled facility for driving new technologies and innovation but more still needs to be done to raise awareness of the Midlands as a global destination of choice," Sara Fowler, Ernst & Young’s senior partner for the Midlands, said.
“While our skilled manufacturing workforce is a powerful attraction, it is also important that the other sectors where the Midlands excels such as life sciences and shared services are highlighted for continued investment, to help ensure much needed growth and jobs.”
In the UK overall, the analysis of investment attitudes puts Germany (35%) as the most popular proposition for major investment in Europe, followed by Poland (10%) and the UK (8%) in third position.
While the UK remains Europe’s top destination for foreign direct investment (FDI) based on figures from last year in terms of actual projects, Ernst & Young has warned it could lose its crown to Germany within two years unless action is taken.
There is clearly no room for complacency, with a clear message that UK business should seek out new markets and opportunities to better compete with European rivals.
The survey also revealed that financial services sector remains the favoured bet among investors for 2013 in the UK, with 36% of those surveyed saying they planned to invest in UK financial services in 2013. The second most favoured sector was energy and utilities (18%).
The UK’s retains attractive qualities for investors, particularly its quality of life, culture and language, stable political environment and infrastructure. The survey also found 86% of investors are confident the UK will overcome its economic challenges — higher than for other European countries (81%) — excluding Germany.
“Germany and Poland have closed the gap," Mark Gregory, Ernst & Young Chief Economist, said.
"Germany’s growth illustrates the importance of attracting more diverse investment, with investors appreciating their two way trade and strong domestic demand — illustrating how linked success in attracting inward investment is to wider economic performance.
“In the UK, the financial services sector remains the main attraction and focus for foreign investors. Due to regulatory uncertainty whether these good intentions will translate into actual projects next, delivering growth and jobs is unclear.”
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