Scotland continues to ‘punch above its weight’ as overseas cash keeps coming -EY

Scotland was second only to London last year in attracting inward investment projects from around the world, according to a new survey from global accounting firm EY.

The overall number of foreign direct investment (FDI) deals done in Scotland last year was the third-biggest on record, boosted by a sharp rise in manufacturing projects, EY said.

Last year was also a particularly good one for the financial services sector north of the border.

The industry in Scotland recorded the highest level of FDI since 2006, with five FDI projects secured.

However, the overall figures were down slightly on 2013 with the total number of investments secured by Scotland from overseas last year reaching 80, down from the 16-year high of 82 recorded by EY the previous year.

EY’s latest annual attractiveness survey also revealed that almost half of all projects coming to Scotland - a total of 37 - involved the US, which represented the highest level of investment from the States in more than a decade.

EY pointed to events such as the Commonwealth Games and Ryder Cup for the continued strong performance in a year that also included the potential negative effects of uncertainty resulting from the Independence Referendum.

But the survey also noted the slight decline in the number of individual projects last year, which was accompanied by a disproportionately larger fall in the number of jobs generated as a result of FDI.

However, EY suggested an “encouraging” rise in scientific research project numbers, which are potentially high-value but generate fewer jobs than some other sectors, as a potential explanation.

A particularly strong performance came from the manufacturing sector, which attracted attracted inward investment more than doubled that of 2013 as the number of projects rose from 15 to 31.

The report indicated growth was led by machinery and equipment projects. There were 15 in 2014, more than double the figure in the previous year.

Speaking of the results of the survey, EY partner Mark Harvey said: “”In an uncertain world, Scotland is punching above its weight in securing global FDI but challenges remain.

“The world economy continues to struggle for growth and FDI values globally fell in 2014. Scotland faces fierce competition for projects from locations not just across the UK, but also worldwide.

“The challenge now for Scotland is to build further on the achievements to date and tackle the areas where it can do better, making Scotland the most successful place it can be.”

Mr Harvey added: “The challenge now for Scotland is to build further on the achievements to date and tackle the areas where it can do better, making Scotland the most successful place it can be.”

EY will next month host a joint business event in New York with Scottish Enterprise and First Minister Nicola Sturgeon, aimed at promoting Scotland as an attractive place in which to invest.

Responding on the EY survey, Ms Sturgeon’s deputy, and finance minister, John Swinney, said: “This is not just a positive year for Scotland but a continuation of a pattern of competitive excellence - over the last 10 years Scotland has secured over 37,000 jobs from FDI, a narrow second only to London and well ahead of all other parts of the UK.”