Manufacturing contributing strongly to FDI flows

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UKTI put out their annual report today on the inward flow of FDI to the UK. We are still second in the world in terms of stocks of inward FDI - but have slipped to seventh in terms of flow (since 2007).

Much of this can be put down to the weakening economic situation here - nearly 1800 projects went ahead in 2008/09 and this is down to 1406 in 2011/12.

There are some bright spots though:

52,741 jobs created by inward FDI in 2011/12, up 26%;

£53.9 billion flowed into the UK in 2011, up 7%;

Number of new investment projects (rather than expansions or M&As) up.

If we focus on our sector in particular the story is also encouraging:

FDI in manufacturing in particular up 22%;

Advanced engineering saw the largest share of jobs created by inward investment (17,379, up 25%)

256 of 1406 inward investment projects were in manufacturing (18% c.f. manufacturing's share of the economy c10%).

China is moving up in terms of number of investment projects - now to third from 7th last year - and an increase in investment of 55%.

It's interesting to see the '7 reasons' that UKTI points to as important for investing in the UK. These include an 'unrivalled business environment', 'an internationally competitive tax environment', a 'world-class skills base', and 'Europe's strongest research and development environment'. UKTI at least seems very clear on the areas of focus for a thriving UK economy.


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