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The UK attracted the second highest number of Foreign Direct Investment (FDI) projects in Europe in 2024 but, like other large European countries, saw overall project numbers decline year-on-year, according to data from EY.
According to the data, the UK secured 853 FDI projects in 2024, which represented a 13% decrease from 2023.
France (1,025 projects) ranked first in Europe for the sixth consecutive year but recorded a decline of 14% year-on-year, while Germany (608 projects) followed in third place and saw its total fall by 17%.
Greater London recorded 265 FDI projects in 2024, making it Europe’s leading region for investment for the second year in a row. However, Greater London’s total did represent a 31% decline on the 359 projects it recorded in 2023.
Europe as a whole recorded a 5% year-on-year decrease in FDI projects, securing a total of 5,383 projects in 2024 which was a nine-year low. Europe’s project numbers in 2024 were 16% below pre-COVID-19 pandemic levels and 19% below the record high in 2017 (6,653).
This is the second consecutive year that Europe’s overall FDI project total has fallen and means the continent has seen FDI numbers decline for four of the last seven years.
France, the UK and Germany, which have historically attracted around 50% of Europe’s annual FDI project total, saw a “more pronounced decline” in project numbers last year as low economic growth, high energy prices and competition from other markets, such as Asia and the United States, impacted investment.
Anna Anthony, EY UK and Ireland regional managing partner, said: “While it’s encouraging to see that the UK remains one of Europe’s top investment destinations, it wasn’t immune to the decline in FDI volume that affected other large European countries last year. Looking ahead, international trade disruption has weakened the global economy and the extent to which this will affect investor appetite this year remains unclear.
“Nonetheless, the UK still has a compelling investment story to tell. It has outperformed Europe in securing investment into future-facing industries such as technology and life sciences, generates the most FDI-related jobs and tends to attract capital from a broad global pool of sources.”
She added: “The Government is taking positive steps to show the UK is open for business, progressing trade relationships with India and the US while also pinpointing those sectors it hopes will yield most growth and investment in its Industrial Strategy. The UK has an opportunity to present an appealing, stable regulatory and business environment and, at a time of worldwide economic turbulence, this could help attract strategically important FDI projects that will drive the greatest level of value, employment and prosperity.”
