Report Highlights Importance Of FDI To Tackle Growth And Support The Levelling Up Agenda
A new economic report is predicting that the size of Liverpool’s economy will grow to almost £12.8bn by the end of 2023 – but it warns that the levelling-up agenda will stall unless more Foreign Direct Investment* (FDI) is attracted to the region.
According to Irwin Mitchell’s UK Powerhouse report, produced by the Centre for Economics and Business Research (Cebr), the value of Liverpool’s economy will be £300m larger and employ 9,100 more people by the end of 2023 compared to Q4 2021.
Despite this increase, economic growth in Northern cities is expected to be exceeded by that of Southern counterparts. The study says the South or East of England will be home to eight of the top 10 fastest growing cities by the end of next year.
Significantly, out of the 50 locations included in the study, over half of the slowest growing economies are expected to be in the North of England.
The report reveals that despite the most recent statistic pointing to a general fall in the number of FDI projects into the UK, the reduction in the number of projects is lower in the North West, at 10%, compared to 23% falls in London and the South East.
The challenge will be for the North West to spearhead a drive for a greater share of what is a key driver for sustained economic growth and to make inroads into the dominance of the South when it comes to FDI. The report suggests that success in this area is the key to levelling up Northern cities, by allowing them to benefit from the job creation and growth that such inward investment brings with it.
Bryan Bletso, Partner and head of International at Irwin Mitchell, said: “This latest UK Powerhouse report makes clear that northern cities like Liverpool have huge potential.
“The UK Powerhouse report shows the North West is well placed to make the jump to higher performance in terms of FDI, having seen a smaller percentage change than other regions.
“The time to invest in Liverpool’s success is now and by doing so, the corresponding economic growth and job creation will go a long way towards safeguarding future prosperity and making levelling up a reality.
“With targeted investment for northern regions in growth areas such as the life sciences, coupled with polices and incentives to encourage new streams of FDI, many more should be able to follow in Manchester’s footsteps by recognising the transformative power of FDI on local economies.
“The North West’s fourth position for FDI is cause for optimism and their performance in the coming years should prove a bellwether for the levelling up process going forwards.
“With a combination of business, local and central government backing, there’s no reason why the North can’t attract its fair share of investment still centred in the south and see the dreams of a true northern powerhouse become a reality.”
* Foreign Direct Investment (FDI) refers to cross-border flows where an investor establishes a lasting interest in a subsidiary located in a country that is not the investor’s. Typically, 10.0% or more of the organisation’s voting power should be controlled by the foreign investor for this to represent a lasting interest.
** GVA – Gross Value Added (the total value of goods and services produced)