Manchester ranked UK’s best performing city for FDI outside London despite fall in projects

• Manchester was once again the UK’s leading city outside London for Foreign Direct Investment (FDI) in 2025, despite seeing projects fall from 44 in 2024 to 31 last year
• Across the region, the North West attracted 51 FDI projects in 2025, representing a 41% year-on-year fall
• The Software and IT Services sector was the North West’s biggest driver of FDI projects in 2025, with a total of nine projects

North West, 23 June 2026: The North West remained one of the UK’s top four regions for attracting Foreign Direct Investment (FDI) projects in 2025 despite an overall year-on-year fall in projects, while Manchester was the best-performing city outside of London for FDI for the fourth time in the last six years.

The EY 2026 UK Attractiveness Survey ranked 259 regions across Europe according to the number of FDI projects each attracted in 2025.

Across the UK, 730 projects were secured, a 14% fall from 853 the previous year, with only Greater London (279 projects), Scotland (108 projects) and the West Midlands (68 projects) attracting more FDI projects than the North West.

The Software and IT Services sector drove more FDI projects (nine) in the North West than any other sector, followed closely by Business and Professional Services (eight).

The North West’s year-on-year fall in FDI meant that its overall share of UK projects fell from 10% in 2024 to 7% in 2025.

Manchester attracted 31 FDI projects in 2025, down 30% from 44 in 2024.

In Manchester specifically, the Software and IT Services sector contributed to the most FDI projects, with a total of six, followed by the Finance, Business and Professional Services and Health and Social Work sectors (four each).

Across the UK, only Greater London (5%), Northern Ireland (65%) and Wales (56%) saw year-on-year growth in FDI projects. The South West’s total was in line with the 2024 figure, with all other regions seeing declines.

France was the leading European destination for FDI in 2025 with 852 projects, a decline of 17% year-on-year. Meanwhile, Europe as a whole recorded a 7% year-on-year decrease in FDI projects as global economic uncertainty related to tariff disruption weighed on investment figures worldwide. Subdued economic growth, high energy prices and competition from other markets, such as Asia and the United States, have also impacted investment into Europe.

Hilary Heap, EY’s North Market Leader, said: “While the North West saw a year-on-year decline in FDI projects, this was in keeping with both the UK and Europe-wide trends, with a variety of economic headwinds including subdued growth and geopolitical uncertainty weighing on growth. However, there remain reasons for optimism. Manchester retained its position as the UK’s leading city for FDI outside London, which is testament to the city’s diverse business community and its significant potential. Manchester has also been open to significant redevelopment in recent years, standing the city in good stead as an investment hub. The technology sector – which forms part of the Government’s Industrial Strategy – continues to be a particular strength for the North West, having attracted more projects than any other sector in the region last year.

“Our latest survey highlights that global investors are prioritising access to a skilled workforce, connectivity and infrastructure, and access to regional grants and incentives when considering locations outside of London. The North West is well-positioned with a strong talent base and projects like Northern Powerhouse Rail strengthening its appeal. Looking ahead, policymakers have an opportunity to capitalise on these strengths by prioritising public and private sector collaboration and a clear focus on innovation to unlock more buoyant levels of FDI growth.”

North West continues to attract tech and manufacturing investment

Although the volume of investment projects in the North West fell in 2025, the region continued to attract high-value projects, with employment created by FDI projects in the region rising from 2,755 to 3,161 jobs year-on-year. The North West’s share of UK FDI employment rose to 11% last year, up from 7.2% in 2024, and the region ranked fourth in the UK for FDI-related jobs. Of the 51 projects secured, the North West recorded 10 projects that announced 100 or more jobs each.

Examining FDI by activity rather than sector reveals that the majority of the North West’s FDI was driven by projects involving manufacturing (15), business services (14) and sales and marketing (10) activity. However, FDI in the region driven by each of these activities was still down year-on-year, with a 40% fall in manufacturing projects, a 46% fall for business services and a 33% decline for sales and marketing.

Sales and marketing was the most prominent activity for driving FDI in Manchester with a total of 10 projects, marginally up from nine in 2024, followed by business services (nine projects) and manufacturing (six projects).

New projects see year-on-year decline in the North West

‘New’ projects – as opposed to re-investments or extensions – are one way of assessing a country/region’s ability to attract fresh investment. For the fourth consecutive year, the UK remained Europe’s leading destination for new FDI projects, ahead of Germany.

In 2025, the North West recorded 29 new projects, down 27.5% from 2024, when 40 projects were recorded. As a result, the UK market share for new projects secured by the North West decreased to 6.1% in 2025, down from 7.5% the previous year.

US remains the leading origin of North West FDI

The United States (US) has been the leading origin of FDI projects into the North West over the last decade by a significant margin, accounting for 27.6% of projects. This trend continued in 2025, during which the US accounted for 29.4% of all investment projects into the region (15 projects out of 51).

India was the region’s second-largest source of FDI in 2025 with six projects.

Other countries that made up the five largest origins for investment were France, Ireland and Japan.

Germany has been the region’s second-biggest driver of FDI over the last decade, accounting for 8.9% of projects. However, Germany was the source of only one FDI project in the region in 2025, down from 11 in 2024.

Peter Arnold, EY UK Chief Economist, said: “While London outperformed the broader European trend in 2025 and remains a highly attractive global investment hub, FDI activity across much of the UK was more subdued. No English region outside the capital recorded growth, and while Wales and Northern Ireland saw year-on-year increases, their overall totals remain significantly below the UK’s traditional investment hubs. This widening gap between London and the rest of the country risks reinforcing long-standing regional disparities.

“Against a backdrop of more cautious global investment flows, the UK must sharpen its focus on where it can compete most effectively and deliver long-term value. Addressing structural barriers – including high energy and labour costs – will be critical to better insulating the economy from ongoing uncertainty. Strengths in sectors such as technology, professional services and financial services remain a clear advantage, but this needs to be complemented by stronger performance in high-value, productivity-enhancing areas such as advanced manufacturing and life sciences. Strengthening regional investment propositions through improved connectivity, workforce capability and a stronger pipeline of investable projects will be essential to translating investor interest into sustained, nationwide growth.”

Skills, grants and infrastructure key for investors when considering locations outside London

EY asked investors to outline the most important factors they considered when deciding whether to invest in locations outside London. The highest number of responses included the availability and skills of the local workforce (30%), followed by access to regional grants and incentives (27%), strength of transport infrastructure (27%) and the cost and availability of local real estate (26%).

Other important investment criteria included the availability of business partners and suppliers, and access to specialised industry clusters (both 21%).