Scotland has come second in attractiveness for foreign investment outside of London for a seventh consecutive year, according to a new report.
EY’s Scotland Attractiveness Survey shows that both in terms of attracting foreign direct investment (FDI) and attracting a number of UK projects, Scotland is in a strong position.
The report surveyed 800 international investments, and for the seventh year running, Scotland was the most attractive place for companies to invest outside of London.
The report showed that there had been a 7.4% increase in the number of projects secured, from 94 in 2018 to 101 in 2019.
Growth in Scottish investment was also at a faster pace than the rest of the UK, with a 5.2% increase (1,109 projects).
Ally Scott, UKI managing partner for EY Scotland, said: “Scotland has yet again achieved an impressive performance on FDI in 2019. The pace and scale of growth achieved is evidence of Scotland being well-placed to tackle the challenges presented by Covid-19 and an uncertain economic environment.
“Importantly, Scotland continues to increase the quality of projects it attracts as demonstrated by the high average number of jobs created, a figure far ahead of the UK in 2019.
“While Scotland has a strong foundation to navigate beyond Covid-19, there is no scope for complacency. Now, more than ever, there must be a strong partnership between government, business and society to formulate a careful, considered and compelling route back to economic growth.”
Scotland also performed better in terms of job creation in 2019 than in recent years, rising to second place from fifth in the UK in 2018.
The average size of FDI projects in Scotland created 83.6 jobs last year, which is the highest since 2011, when the figure was 116.2, and ahead of the UK average for 2019 of 51.4.
The shift in investment sectors has seen machinery and equipment investment grow by 58% and agri-food by 78%.
This is the first time in a decade that the service sector has not ranked in the top two.
Mr Scott added: “Scotland has a real strength in the diversity of projects it attracts, with a healthy blend between manufacturing and services. The boost in manufacturing places Scotland as the UK leader for this sector.
“This, along with the growth in machinery and equipment and agri-food, plays directly into Scotland’s international reputation and capabilities within the food and drink market.”
Economy Secretary Fiona Hyslop said the report is “hugely encouraging”.
She added: “We will feel the impact of Covid-19 for some time and the outlook for international trade and investment has changed significantly following the pandemic.
“There is also the danger presented by a no-deal Brexit if the UK Government refuses to ask for a two-year extension to the current transition period and the threat that poses to Scotland’s inward investment success story.
“However, this survey demonstrates that Scotland is well placed to meet the economic challenges as we work to recover and restart our economy.”