Greater Manchester named England’s most attractive location for FDI outside of London

According to the latest report by law firm Irwin Mitchell, Greater Manchester is now the highest-ranking city in England outside of London for Foreign Direct Investment (FDI) attractiveness.

The study, which incorporates analysis by the Centre for Economics and Business Research (Cebr), examines the attractiveness of the UK’s largest cities for foreign direct investment (FDI) by analysing 50 locations based on 10 key indicators*. 

The report says Greater Manchester has become potentially more attractive to foreign investment since the previous quarterly report but adds there are warning signs for the future due to its slowing economy and poor online connectivity.

Greater Manchester moves up three places with an overall score of 47.1. The report says that the authority’s strong overall performance stems from skills, supported by its relatively large number of economically active individuals and strong university presence. 

It adds however that Greater Manchester’s overall score faces some downward pressure due to its relatively poorer GVA forecast. Local Infrastructure is described as ‘an area for improvement’, primarily a result of relatively poor online connectivity levels.

Quarter-on-quarter change in FDI Attractiveness score across Q4 2024 and Q3 2024 (Irwin Mitchell / Cebr)

Liverpool, along with Aberdeen, Cardiff, and Newcastle, emerged as the biggest risers in the latest quarterly report. 

The study says these locations benefit from their relative distances from a Freeport or an Investment zone, with all four cities enjoying this advantageous status.

Freeports are designated areas, typically located at seaports or airports, where normal customs and tax rules do not apply. These zones offer various incentives such as tax reliefs, simplified customs procedures, and reduced tariffs to encourage economic activity, trade, and investment. The aim is to create hubs of innovation and economic growth by attracting businesses that benefit from these regulatory advantages.

In the case of Liverpool, its City Region Freeport, is described as a multi-modal Freeport driving growth in the UK’s advanced manufacturing, biomanufacturing, logistics, and low carbon industries. It is estimated to add £850m to the local economy.

FDI Attractiveness - Biggest risers and fallers (Source Irwin Mitchell / Cebr)

Bryan Bletso, Partner and Head of International at Irwin Mitchell, commented on the findings:

“Despite the economy facing numerous challenges, the level of foreign direct investment into the UK remains high. Our latest report provides valuable insights into the factors driving investment decisions and highlights the importance of strategic locations such as Freeports and Investment Zones. These findings will be crucial for policymakers and businesses looking to attract and retain investment in the UK.”

Pushpin Singh, Senior Economist at Cebr, said:

“Our findings underscore the transformative potential of Freeports and Investment Zones in reshaping the UK’s investment landscape. Cities like Liverpool are emerging as significant beneficiaries, demonstrating how targeted infrastructure and skills development could potentially create hubs of economic opportunity.”

The Office for National Statistics recently published the latest FDI statistics, revealing that the value of the UK’s inward FDI position increased by £126.8 billion, reaching £2,068 billion. 

According to the latest statistics from the Department for Business and Trade, 1,555 projects landed in the UK during the 2023/24 financial year because of FDI, resulting in 71,478 new jobs being created. 

London attracted 503 FDI projects which created 23,541 jobs. This compares to the North East (4,296 jobs), North West (5,097 jobs) and Yorkshire (3,732 jobs). Highlighting the dominance of London, the capital is attracting approximately the same number of FDI projects as the combined number for the , North West, the Midlands, North East, and Yorkshire. 

* FDI Attractiveness - The 10 indicators