Traditional UK economic hubs such as London and the Northern Powerhouse may have a new rival on their hands when it comes to winning foreign investment and creating jobs in the form of the Midlands Engine - a region that is home to companies including Rolls-Royce, Bombardier, Toyota and Boots
The Midlands economy is catching up with the rest of the UK, according to a new survey.
An 8% increase in foreign direct investment (FDI) projects last year – up from 130 to 140 schemes was reported by multinational professional services firm EY’s 2018 UK Attractiveness Survey.
The region also had the second highest number of jobs created of any British region, with 10,606 roles.
The so-called Midlands Engine includes cities such as Birmingham, Nottingham, Coventry, Derby, Leicester and Lincoln, which have been encouraged to pool their resources by the Government to become more powerful as a joined-up economic unit.
Home to 10 million people and 800,000 large and small businesses, the region’s main strengths include its manufacturing base, with companies including Rolls-Royce, Bombardier, Toyota and Boots.
It also has an emerging presence in the financial services, digital and biosciences industries.
EY’s figures show it is beginning to rival the country’s established economic hubs like London and the Northern Powerhouse – which includes Manchester, Liverpool Leeds, Newcastle and Sheffield, among others.
Simon O’Neill, managing partner at EY in the Midlands, said: “The Midlands Engine vision for growth is attractive on the international stage and it’s positive that we are seeing it translate into record levels of investment across a broad spectrum of sectors and importantly creating jobs.”
Midlands Engine performance by city
As far as attracting FDI is concerned, Birmingham remained the area’s top performer, securing 21 projects in last year, though this represents a 34% dip from 2016.
The city is ranked fourth on the list of the top 20 inward investment locations in the UK, behind London, Manchester and Edinburgh.
Coventry came sixth, making it the Midlands Engine’s second best city with a 60% increase in projects from 2016.
Other appearances from the area on the list included Solihull in joint 18th place with a 40% increase to reach seven projects, and Nottingham – joint 20th – which went from one in 2016 to six last year.
Midlands Engine programme director Fiona Piercy said: “The Midlands Engine Vision for Growth sets out priority areas for investment in infrastructure, trade and investment, innovation and enterprise that will enable the Midlands to add over £50bn to the Midlands and UK economy by 2030, helping drive Britain’s post-Brexit economic growth.”
Putting the numbers in context
In terms of FDI, the Midlands Engine came fourth in the UK behind London with 459 projects, the Northern Powerhouse with 235, and the southern region of England with 203, but ahead of Scotland with 116.
It lost out only to the Northern Powerhouse for job creation though, which generated 14,158 new positions, putting it ahead of London which posted 8,552.
The area’s performance contributed to the UK retaining its position as the number one destination for FDI in Europe, despite a decline in sentiment from foreign investors towards Britain as a place to invest.
Ms Percy added: “We welcome the news of record investment and job creation in the Midlands and our unique partnership is working to put robust plans in place that will bolster this performance further to create a better and more balanced economy.”