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Foreign Direct Investment into the UK Looking Positive. Thanks to Brexit?

Updated: Oct 23, 2019

We think the chart below showing quarter on quarter inward Foreign Direct Investment amounts is interesting in that recent quarters are more consistently positive than in the 6 years preceding the Brexit referendum.

In 2017 Inward UK FDI increased by 13%

The UN Commission on Trade & Development reported that 2018 Inward UK FDI totalled £50.4bn, more than France & Germany combined.

Is this despite Brexit? Or because of Brexit?

And if the picture is so rosy, why the media gloom?

Well the first query is more difficult to answer, given that those who chose to invest (or not) in the UK as a consequence of Brexit don't tend to publicise their investment rationale. At least, not in openly political terms. Plus, we are talking about the combined decisions of many thousands of people across the world.

We have read reports on the matter from the Department of Trade & Industry, EY, ONS and the good old Financial Times. Among those who recognise an uplift, there is a clear consensus that no-one really knows the answer. Or they do, but are not inclined to stick their neck out.

Not particularly helpful.

We do however think the results of EY's 2018 UK Attractiveness Survey are telling.

Some investors have been stepping up. Others ducking out. But it's pretty marginal.

As for media pessimism, it is true that the total number of investment projects and UK jobs created is down and many outlets have pivoted to this metric when assessing the "human cost" of developments. Or they have sought to fit the facts to their preferred narrative. Either of which you may find fair enough or blatant bias, depending on your point of view. Although, for perspective, we do note that FDI generated UK jobs created in 2018-19 is still in comfortably positive territory at 57,265.

But we are here to look out for business owners taking a view on the future. With apologies, one last table to follow should give you some sense of the picture...

Source: Department for International Trade, Inward Investment Results 2018-19

A cursory look at the Mergers & Acquisitions line will tell you that, whilst we are not back at a peak, there have been plenty of internationally financed company purchases in recent years.

During which time, the Symmetry team have completed transactions with purchasers based in Italy, the USA, France, Germany & South Africa. And fielded offers from many more nations besides.

We are urging clients not to hang about if they want to be in a position to capitalise on interest from those international investors who are buying into what they see as the opportunities from either an emerging 'Global Britain' or renewed confidence & certainty arising settlement of the terms & timing of Brexit.

As ever, Symmetry advise & clients decide. And can then count on us to deliver.

Jonathan Tate

October 2019

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