North East bucks trend with investment lift

The North East has defied a national downturn in foreign investment, according to EY’s latest UK Attractiveness Survey.

The region attracted 42 foreign direct investment (FDI) projects in 2024, its highest total since 2017 and a 10.5 per cent increase on 2023.

This rise came against a backdrop of a 13 per cent fall in UK-wide FDI projects.

Newcastle was a standout performer, climbing to seventh in the UK’s city rankings for FDI, up from 11th in 2023. 

The city secured 13 projects last year, compared to 11 the year before.

Business services and manufacturing were the biggest drivers of investment in the region, accounting for more than half of the North East’s total projects. 

The number of manufacturing-related projects rose 20 per cent year-on-year to 12, while business services topped the list with 13 projects.

Michael Scoular, managing partner at EY’s Newcastle office, said: “The North East’s performance in attracting FDI was encouraging in 2024, with the region displaying its ability to secure projects in strategically important areas such as manufacturing and business services. 

“With the UK’s overall project numbers down, the fact the North East total saw year-on-year growth is a testament to the region’s resilience and versatility. 

“Looking beyond this year, our latest investor sentiment survey results also bode well for future prospects, with 11 per cent of those looking to invest in the UK over the next 12 months planning to establish or expand operations in the North East.”

The US remained the largest source of investment into the North East, contributing 31 per cent of 2024’s total, a bigger share than its contribution to the UK overall. 

France, Ireland, Belgium and Germany also featured among the top investor countries.

Despite the rise in project numbers, employment linked to FDI in the region fell by 35 per cent to 1864 jobs in 2024.

Michael added: “FDI-related employment figures, which can be volatile from year to year, were down quite significantly in 2024 – an area to build and improve on going forward to support prosperity and opportunities across the region.”

The broader North of England outperformed most UK regions, with Yorkshire and the Humber and the North West also seeing sharp rises in project numbers. 

In contrast, most other UK regions saw a drop in inward investment.

Alongside an analysis of investment numbers, EY also conducted a survey comprising interviews with a panel of 400 international investment decision-makers between January and March 2025.

This found that grants, skilled workforces and strong supply chains were among the top factors when choosing locations outside London – criteria where the North East is seen to perform strongly.

Michael added: “Our survey highlights that access to a skilled workforce, the availability of partners and suppliers and the strength of local transport infrastructure are key criteria for global investors when considering locations outside London, so collaboration between local and national policymakers to support these priority areas in the North East will be pivotal going forward.”

Peter Arnold, EY UK chief economist, added: “Tech has been the consistent lead sector for UK FDI over the last twelve years, and London has continued to hoover up the lion’s share of digital projects. 

“But the sector and activity mix outside London remains diverse, which could be an advantage for the UK in the years ahead. 

“The prominence of manufacturing in the North West, logistics in the Midlands and R&D activity in the South East, alongside renewable energy opportunities in Scotland and the North East, means the UK has various hubs that could potentially lead Europe in the years ahead.”

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