Manufacturing might boosts West Midland FDI levels

THE success of the West Midlands’ manufacturing sector has helped drive up levels of foreign direct investment across the region.

Latest figures show the UK has attracted the most inward investment projects since records began in the 1980s – with Greater Birmingham and Solihull the most successful LEP area in the country.

Annual investment figures from UK Trade & Investment (UKTI) for 2013/14 show the UK attracted 14% more projects than last year. This is supported by external independent sources, such as EY, which have confirmed the UK remains the number one destination in Europe for FDI projects.

The UKTI report also shows 66,390 new jobs were created, the highest since 2001. In total 1,773 investment projects were set up by foreign businesses in the UK during the 2013/14 financial year.

Trade Minister Lord Livingston said: “It’s been an exceptional year for foreign investment with record project numbers creating the highest number of new UK jobs since 2001.”

The USA led the way as the largest source of FDI projects for the UK, generating 501 projects, up 27%. European companies also demonstrated increased interest in the UK. The two largest European contributors were France and Germany, both delivering over 100 projects, representing rises of 18% and 31% respectively.

The highest numbers of projects were in sectors including Advanced Manufacturing.

In Greater Birmingham and Solihull there were more FDI projects – 77 (an increase of 57%) – than anywhere else in the UK.

The area also created the most jobs – a total of 4,841 – a 98% increase on the previous year, compared to 3,350 at its nearest challenger, New Anglia LEP.

The 77 projects owed much to the region’s traditional strengths like advanced manufacturing and the automotive industry, and backing for fast-growing new industries like digital media and IT services.

The number of new jobs created in the Greater Birmingham area rose to 4,841 from 2,439 in 2013, with significant investment and jobs coming from the advanced manufacturing sector.

Jaguar Land Rover led the charge with a £1.5bn investment in its Solihull site as part of plans to develop an all-new technically advanced aluminium vehicle architecture. Vax, the household floorcare manufacturer owned by Hong Kong-based TechTronic Industries, was another leading name to show its commitment to the area by placing its new R&D facility in the heart of Birmingham’s Colmore Business District.

The dramatic increase in investment in the digital sector was highlighted by the BBC’s decision to locate its new digital innovation team in Birmingham.

The area’s thriving financial and professional services sector also saw a boost with German investment house, Deutsche Bank, announcing its ambition to become the largest trading bank in the city.

Further major investors in the professional sector include Hogan Lovells, a growing American law firm, which chose Birmingham ahead of other regional cities as the location for its new UK legal centre. DTZ, the global real estate consultancy, also brought its European financial control centre to Greater Birmingham from Eastern Europe.

Chairman of the GBSLEP, Andy Street, said: “Greater Birmingham has worked hard to maintain its position as a leading global destination for foreign businesses looking to invest. The Birmingham/Solihull area is leading the way on exports, start-ups and manufacturing. FDI has been the catalyst for this success. These latest FDI figures are testament to the appeal of Greater Birmingham, and it is tremendous news that the GBSLEP is at the forefront of delivering economic growth in the regions.”

Neil Rami, Chief Executive of Marketing Birmingham, said the positive news surrounding HS2 was also helping to have a beneficial effect.

The Black Country similarly experienced a sharp increase in the number of jobs created and safeguarded by FDI with at least 850 jobs created or safeguarded. The number of FDI projects rose from four to 18.

Stewart Towe, Black Country LEP Chair, said the figures were testament to the ongoing work being done through the LEP to promote the Black Country as an investment destination.  

“Our sector strengths, coupled to the effort we have put into raising the profile of the area, mean that we are at the head of a growing pipeline of enquiries in the automotive, aerospace and construction technologies sectors,” he said.

Wayne Langford, Head of Invest Black Country, said: “Not only has the Black Country attracted investment that created or safeguarded over 850 jobs last year, but we have also seen a considerable increase in awareness of the Black Country amongst overseas businesses and agencies. This has led to a strong pipeline of potential FDI projects that Invest Black Country is now working, with our partners, to land.”

The area again owes much to JLR’s decision to locate its £0.5bn engine plant in the Black Country Enterprise Zone at the i54 near Wolverhampton.

Coventry and Warwickshire LEP said almost 2,500 new jobs had been delivered through inward investment during 2013/14.

The 26% increase in jobs was spread throughout advanced engineering and manufacturing, business and professional and financial services.

The area attracted 43 FDI projects in 2013/14, which created 2,427 new jobs and safeguarded 719 jobs, securing a total of 3,146 jobs.

Almost half (19) of the 43 FDI projects were set-up from Europe, the Middle East and Africa, with 14 from the Americas and 10 from the Asia Pacific.

Inward investment projects were stretched across a range of different sectors with the majority in manufacturing, research and development and services.

Companies to have benefited include Coventry taxi maker LTI through the Zhejiang Geely Holding Group, CovPress, following its sale to Shandong Yongtai, logistics company Deutsche Post at Swift Valley Park in Rugby, Domestic and General in Bedworth and Bosch motorsport in Warwick.

Martin Yardley, chief executive of the CWLEP, said the big increase in FDI projects was due to greater collaboration between the LEP, UKTI and its local partners over the last 12 months.

“We are pleased with these figures because attracting this level of inward investment from across the globe highlights the attractive place that Coventry and Warwickshire is to live and work,” he said.

“Funding from the Government’s City Deal and Growth Deal has enabled the LEP to concentrate on the sectors in which we excel to attract inward investors and the launch of the Clearing House will be key in focusing on investment opportunities in the advanced manufacturing sector. The automotive sector in Coventry and Warwickshire is thriving but we do not want to stand still.”