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The National
10 hours ago
- Business
- The National
Scotland bucks international trend on foreign investment, data shows
Figures from EY – one of the 'big four' accounting firms – showed that in 2024 Scotland attracted 15.8% of the UK projects targeted for foreign direct investment (FDI), up from 14.4% in 2023 and above its decade average of 11.5%. EY further reported that 25% of the global investors planning to establish operations in the UK next year expect to choose Scotland. This was second to London, which polled at 62%. This increase in Scotland's share comes against a 'backdrop of a marked decline in project numbers' across Europe, EY said. The firm said that Scotland is ranked sixth among the top ten FDI locations in Europe. READ MORE: Scottish economy 'to outstrip UK, France, and Germany in 2026', KPMG projects In 2024, the country attracted 135 FDI projects, the second highest ever recorded after 2023's 142. The UK as a whole recorded 853 FDI projects in 2024, a 13% decline from 2023. Glasgow (27 projects) became Scotland's leading city for FDI for the first time in five years – a position that Edinburgh held between 2020 and 2023 – and the second most popular UK city outside London, after Manchester (44 projects). Three Scottish cities are in the UK top 10, with Edinburgh having secured 24 projects and Aberdeen 12 projects. Scotland's top two FDI sectors were machinery and equipment (19 projects), and software and IT (15 projects). Agri-food and utility supply came joint third on 14 projects each. Scotland was the UK leader in oil and gas FDI (seven projects), as well as inward investment in the utility supply, electronics, and the machinery and equipment sectors. Glasgow attracted more FDI projects than any other Scottish city in 2024 (Image: Newsquest) Scotland attracted 11 financial services FDI projects in 2024, representing a decade high, and is the top location outside London with Edinburgh (six projects) tied with Manchester. The US was the single biggest country of origin for Scotland's FDI projects, with US projects rising by 37% to 37 projects, accounting for 27.4% of Scotland's total during the year — above the 23.7% of UK projects originating from the US. EY Scotland managing partner Ally Scott said: 'Put simply, Scotland continues to punch above its weight with inward investment. 'While project numbers slipped back slightly in 2024 from their record high the previous year, a much sharper fall in projects into the UK overall saw Scotland's share increase for the sixth year running. 'In doing so, Scotland consolidated its decade-long position in second place for UK FDI. READ MORE: Scottish Winter Fuel Payments to match UK's after U-turn, John Swinney says 'While FDI is only one part of the Scottish economy, the challenge is ensuring the policy landscape continues to react to changing business and demographic needs. 'Many priorities of international investors considering Scotland are very similar to those of our homegrown business community – future-proofed infrastructure, an efficient planning system, a skilled workforce, simplified tax structure – improve these levers and you're activating broader economic growth. 'Far from relaxing after a job well done, it's time for Scotland to take some confidence from these findings and to double-down and cement its hard-won position.' SNP Deputy First Minister Kate Forbes (Image: Jane Barlow/PA) Deputy First Minister Kate Forbes welcomed the EY figures, saying that 'given the geopolitical uncertainties clearly affecting investor confidence across the world, this is an incredible endorsement of Scotland's proposition as a destination for global investment'. She went on: 'A huge amount of work, across both the private and public sectors, goes into securing these projects, which are vital for economic growth, job creation and bringing benefits across our towns and cities. 'From the likes of green aircraft engine ZeroAvia to ticketing hub Humanatix, 2025 is bringing further significant investment and exciting projects to Scotland. 'The Scottish Government will continue to work with businesses and our 'Team Scotland' partners to continue building the country's reputation as a world class location for foreign investment.'
The Herald Scotland
11 hours ago
- Business
- The Herald Scotland
Glasgow and Edinburgh swap places as Scottish FDI strong
Scotland secured 135 FDI projects last year, the EY figures show. Although down by 4.9% on the all-time high annual number of 142 FDI projects won, in 2023, the figure for 2024 was the second-highest on record. Scotland's share of UK FDI projects was 15.8% last year, up from 14.4% in 2023 and significantly higher than the average of 11.5% over the last decade. In 2022, Scotland's share was 13.6%. Glasgow, with 27 projects, became Scotland's leading city for FDI for the first time in five years - a position that Edinburgh held between 2020 and 2023. And Glasgow was the second-most popular UK city outside London for FDI, after Manchester, which won 44 projects in 2024. Scotland's 'three major cities are once again in the UK top 10 cities', EY observed, with Edinburgh having secured 24 projects and Aberdeen 12 projects. EY's figures show Scotland has been second only to London in terms of the number of FDI projects won in every year since 2015. Scotland was also second only to London in 2010 and 2012. For 2024, Scotland is ranked sixth among the top 10 FDI locations in Europe. The UK recorded 853 FDI projects in 2024, a 13% decline from 2023, making it Europe's second-top country for attracting inward investment. France ranked first in Europe in 2024 with 1,025 projects - a decline of 14% year on year. Read more Around 25% of global investors planning to establish operations in the UK over the next year said they expected to choose Scotland. This put Scotland second only to London, for which the figure was 62%. The US remains Scotland's top source of FDI projects. Scotland attracted 37 FDI projects from US players in 2024 - a rise of 37% on 2023 and bringing the total over the last decade to 356, EY noted. The US accounted for 27.4% of Scotland's total number of FDI projects during 2024. This was a higher proportion than the 23.7% of UK FDI projects originating from the US. The number of FDI projects attracted by Scotland from German players fell by 40% to 12 last year. Even so, Germany remained the second-biggest source of FDI projects for Scotland in 2024, followed by France with eight projects. Ally Scott, managing partner of EY Scotland, said: 'Put simply, Scotland continues to punch above its weight with inward investment. While project numbers slipped back slightly in 2024 from their record high the previous year, a much sharper fall in projects into the UK overall saw Scotland's share increase for the sixth year running. In doing so, Scotland consolidated its decade-long position in second place for UK FDI.' He added: 'While FDI is only one part of the Scottish economy, the challenge is ensuring the policy landscape continues to react to changing business and demographic needs. Many priorities of international investors considering Scotland are very similar to those of our homegrown business community - future-proofed infrastructure, an efficient planning system, a skilled workforce, simplified tax structure - improve these levers and you're activating broader economic growth. 'Far from relaxing after a job well done, it's time for Scotland to take some confidence from these findings and to double-down and cement its hard-won position.' Peter Arnold, EY UK chief economist, said: 'London remains the leading UK destination for investment, while Scotland has now achieved second position for each of the last 10 years.' Scotland's top FDI sectors in 2024 were machinery and equipment, with 19 projects; software and information technology, with 15 projects; and agri-food and utility supply, in joint-third place with 14 projects. Meanwhile, Scotland was the UK leader in FDI in oil and gas, with seven projects, as well as in inward investment in the utility supply, electronics, and machinery and equipment sectors. Scotland attracted 11 financial services FDI projects in 2024, representing a decade high, and is the top location outside London for inward investment in this sector. Edinburgh, with six FDI projects in financial services, is the joint-top city outside of London for inward investment in this sector, alongside Manchester.
The Independent
06-03-2025
- Business
- The Independent
Economic growth forecast to slow amid fears over US tariffs on whisky
Economic growth is forecast to slow amid concerns over US tariffs on whisky after Scotland outperformed the UK last year. Ernst & Young LLP warned growth prospects for 2025 'are weaker than previously anticipated', with expected Gross Value Added (GVA) growth of 0.9% – down from 1.3% last quarter. It said while GDP data suggests a favourable outlook with growth in Scotland outperforming the UK last year, 'it masks the quarterly profile of growth which shows a slowdown throughout 2024', with growth of 0% in the fourth quarter. This coincided with rising inflation, which surged from 1.7% in September to 2.5% by December, and then 3% in January 2025. The EY Item Club Scotland report forecasts growth to return at GVA of 0.9% in 2025, followed by weaker than previously anticipated growth of 1.5% in 2026 and 1.3% in 2027. A spokesperson said: 'Forecasts indicate that private services sectors and construction will drive robust GVA growth and maintain above-average growth in the following years.' The report suggests households have become 'more cautious amid growing economic uncertainty', and with employer national insurance contributions (NICs) set to increase from April, it warned vacancies exist with employers 'struggling to fill roles', amid the possibility of an increase in unemployment due to the national insurance rise. Consumer and business confidence have also taken a hit, with the Composite Consumer Sentiment Indicator dropping to its lowest level since early 2024, the report said. One of the significant risks of the economic forecast is the potential impact of US tariffs, with Scotland's largest export, whisky, potentially vulnerable given America is its largest market. A spokesperson said: 'Even before the last UK Budget, ONS figures found Scottish businesses reported they would most likely raise prices (41%) or absorb within profit margins (35%) any future increases in employment costs, and only 16% said they would reduce headcount. Exactly how firms will respond is uncertain. 'Across these sectors, we expect no growth in wholesale and retail jobs this year, a small decline in arts, entertainment and recreation, and relatively muted growth in accommodation and food. 'However, the downside risk to the outlook for these sectors is greater, as they also typically have relatively higher concentrations of lower-paid staff. This means they are more vulnerable to the higher NICs given changes involve reducing the threshold at which firms start paying tax combined with the 6.7% increase in April in the national living wage.' EY Scotland managing partner Ally Scott said: 'Scotland continues to grapple with low productivity and high labour market inactivity. 'Despite outperforming the UK last year, which is very welcome news, the pronounced slowdown at the end of last year has led to another downward revision of our growth forecast. 'The shared challenge to both public and private sectors is the pressing need to address productivity, labour market and growth trends, and try to turn this into an economic opportunity. 'Consumer and business confidence has also taken a hit, reflecting concerns with the economic outlook and looming tax changes. 'Scotland's proportionally higher population of private, owner-managed businesses means these challenges will be of acute concern – and that's before inheritance tax and associated succession planning is taken into account. 'Before the last UK Budget, ONS figures found 41% of Scottish businesses said they would most likely raise prices to meet any future increases in employment costs, and the reality of higher employer NICs is playing out in real time. 'Many are watching with interest to see if the mood music around energy policy shifts in the US along with the recent Rosebank (oil field) court ruling will trigger an uptick in confidence in Scotland's energy sector. 'With the global sentiment dial shifting even slightly, we could see financing begin to flow somewhat easier into the sector to help solve some of the biggest challenges in our energy transition.' EY Scotland managing partner for financial service Sue Dawe said: 'Addressing skills shortages and enhancing workforce participation will be essential in revitalising Scotland's labour market. 'While household incomes are expected to recover, inflationary pressures and cautious business sentiment may dampen investment and, therefore, hiring. 'Growth in mortgage lending is forecast to more than double this year as falling interest rates boost housing market activity. 'This will undoubtedly be welcome news to the construction sector, but Scotland's infrastructure requires sustained investment and support to maintain momentum.'
