It has been reported investors now own £483 billion pounds of commercial property in the UK, representing 55% of the total. Not only is this the highest value to date, but it exceeds the previous peak reached prior to the global financial crisis in 2008.
Previously, UK institutions such as insurance companies and pension funds were the biggest direct investors; now, they account for just a fifth of the total, down from a quarter in 2005. In contrast, foreign direct investment in commercial property has increased rapidly over the last decade and overseas investors currently own 28% of UK commercial property – typically held as investments.
Commercial property aside, foreign direct investment (FDI) is also heavily influencing our job market. In fact, data collated from the ‘Department for International Trade’ report (first published 30th August 2016) by Gov.uk dictates 2,213 FDI inward investment projects were secured in 2015 to 2016 – altogether generating 116,000 jobs – the second highest number on record.
The same year, almost 1,600 new jobs were created per week by FDI and, since 2010, nearly 390,000 new jobs have subsequently been created here in the UK. The USA remains the UK’s largest source of inward investment; providing 570 projects. This was followed by China (including Hong Kong) with 156 and India with 140.
Bearing this in mind, we decided to consider exactly which industries are benefiting the most from this surplus of foreign investment, in terms of job creation specifically.
It’s clear to see from the data that the financial and professional services sector is the number one industry benefiting from foreign investment, with job numbers increasing by 20% in the last year. In fact, this sector has previously attracted far more investment than any other; with overseas companies inputting over 100 billion pounds into UK financial services over the past decade. The advanced manufacturing industry follows closely behind, with a 13% job increase, pipping creative industries and ICT (with a 7% increase) to the number two slot.
The energy and infrastructure, life sciences and electronics and communications industries have collectively seen a decrease in job opportunities over the past year – life sciences most affected with a 32% drop. Yet, each have maintained a positive increase in the amount of FDI projects forming.
An extract from the Telegraph comments that Britain’s science and technology sectors need not fear; they are expected to make a drastic “leap” in terms of hiring in 2017 (per the Confederation of British Industry) – a vote of confidence following all things Brexit.
Overall, the same report claimed 41% of companies expect to grow their workforce’s this year and certainly, this positive, alongside the UK’s strong FDI performance across these 6 sectors, does indicate that we will manage to maintain our position as one of the top countries to invest in. What’s more, we stand to provide – and create – valuable job roles across every industry.
Savoy Stewart director, Darren Best comments:
“There’s no doubt that we are in a dubious time: a lot is set to change in 2017, and the free fall we are all experiencing post-Brexit is certainly chaotic, particularly in terms of business. However, from analysing recent data, I am confident the UK will remain a key market – just as it ever was. Our ties with investors all over the world remain interwoven and strong; we should embrace change, reaffirm our partnerships and focus on all that we have to offer.”
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