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New figures from the Department for International Trade show that investment in the UK by overseas firms has declined sharply in recent years.
The number of new projects in the UK fell 14% in 2018-19.
At the same time, there was a 24% fall in the number of jobs created.
In the previous financial year, 75,968 new jobs were created. But in the financial year just ended, that number fell to 57,625, the lowest level for seven years.
There was an even sharper drop in the number of existing jobs which have been secured by further investment in the UK.
It would, however, be very difficult to realise that foreign direct investment in the UK was declining from the Department for International Trade’s own news release about these figures.
Nowhere does it mention that investment is falling or fewer jobs being created. Instead, it includes an analysis of which regions of the UK are doing best, while pointing out that the UK remains the number one European destination for foreign investment and is the number one destination in the world for US investment.
Although that is all true, the UK is facing increasing competition from countries such as Ireland, France and Germany, and the number of businesses setting up sites here has been in decline since 2014-15, when almost 85,000 new jobs resulted.
Brexit uncertainty
These figures tie in well with data on investment in the UK by British firms, which shows many are putting off spending decisions, a move that the governor of the Bank of England, Mark Carney, blamed on continued uncertainty over Brexit.
Also, while in the past many foreign firms such as Japanese carmakers, set up shop in the UK to gain access to the EU’s single market, it is now far from certain that frictionless access to the rest of the EU will last beyond 31 October, when the UK is due to leave the EU.
There has, however, been an increase in the number of British businesses bought by overseas firms, which rose by 8%.
That is probably down to a combination of factors. Many international firms are listed on the UK stock exchange and so a high proportion of mergers and acquisitions happen in the UK, even if they do not involve UK companies.
Meanwhile, the fall in the value of the pound has made it much cheaper for foreign companies to buy things in the UK.