Scotland suffers ‘steeper’ drop in overseas investment projects than the UK
The number of projects involving foreign firms investing in Scotland fell by almost a fifth last year, a new report has revealed.
There were 94 projects in 2018, a drop of 19% from the 116 such investments made in the previous year.
The figures, revealed in professional services firm EY’s annual attractiveness survey, showed Scotland suffered a “steeper” decline than the UK, where foreign direct investment (FDI) projects decreased by 12.5%
But despite this, Scotland retained its position as being the second most attractive part of the UK for overseas investors – behind London.
“In a tough year for foreign direct investment (FDI) into the UK, Scotland put in a resilient performance,” the report said.
“In 2018, Scotland continued to attract high numbers of FDI projects — albeit below the level achieved in 2017, reflecting a declining trend seen across the UK as a whole.”
It blamed Brexit uncertainty for this, saying: “While FDI projects in London held firm in 2018, the decline in projects across most regions of the UK appeared to reflect the uncertainty surrounding the Brexit process, with 15% of companies in our 2019 survey of international investors saying they have put UK investment plans on hold as a result of the vote to leave the EU.”
Trade minister Ivan McKee said the research “confirms Scotland’s leading position as an attractive destination for inward investment from around the world”.
He added: “The country remains the most attractive destination in the UK outside London for projects secured, for the sixth year in seven.
“It is hugely encouraging that the perception of Scotland being an attractive investment destination is growing among investors – this is a significant achievement given the intense competition for inward investment and an indication our efforts to increase our international presence are paying off.
“However, the significant uncertainty created by Brexit has played a part, with the UK looking increasingly less attractive to investors. That is why retaining Scotland’s position is such an accomplishment.”
Ally Scott. senior partner with EY, said that while the “overall picture is more subdued than in previous years, there is some good news across Scotland”.
He noted that Edinburgh, Glasgow and Aberdeen were in the top 10 UK towns and cities outside London for attracting inward investment.
And he stated: “It’s important to consider these figures in context. Scotland has had three consecutive years of record-breaking FDI numbers – an unprecedented run of success.
“Make no mistake – this is a picture of a resilient Scotland standing tall in a challenging UK-wide environment to secure inward investment, set against an unsettled European economic landscape.
“Given the uncertainty of Brexit and the resulting cautious market conditions we are seeing, both in this year’s Scottish Attractiveness Survey findings and in talks with clients, these figures demonstrate the strength of ‘brand Scotland’.”