Scotland Receives Record High FDI

Scotland won a record number of investments from overseas in 2016, although growth was substantially lower than the previous year. There were 122 foreign direct investment deals done over the course of last year, up from 119 in 2015.

The Ernst & Young LLP Scotland Attractiveness Survey showed Scotland was the second most popular part of the UK to invest in behind London. This is the fifth year in a row that the country has been in that position, BBC reported.

However, Scotland won a smaller share of overseas investment in 2016 than previously, with 10.7% of deals coming north of the border compared with 11.2% in 2015.

Foreign direct investment in Scotland grew by 2.5% in 2016—lower than the 7% increase recorded across the UK for that year and significantly down from 2015 when investment in Scotland grew by 51%.

Mark Harvey, EY’s senior partner in Scotland, said a “halo effect” from events such as the Commonwealth Games and the Ryder Cup may have resulted in “abnormally high” levels of investment in 2015.

Scotland’s share of the jobs created from overseas investment last year was half what it was in 2015, with 6% of UK posts created by foreign companies’ investment in Scotland compared with 12.7% in 2015. Deals involving overseas firms created fewer jobs per project, with the average falling from 45 positions in 2015 to 24 the following year.

Three Scottish cities were in the UK’s top 10 for attracting FDI in 2016, according to the research, with Glasgow fifth after a 27% increase in the number of such projects in 2016.

Edinburgh fell three places in the list to sixth but Aberdeen went from 10th to seventh place.