news opinion Reading is thriving
Readers perusing the pages of our Reading Number 1 City Update supplement will see just how buoyant the town is.
The Royal Elm Park development, new Science Park, exciting new workplace environments such as Thames Tower and The White Building, and the vibrant business parks are all part of Reading’s new- look as it aims to become one of the most exciting commercial centres in the country.
Businesses in Reading are unsurprisingly positive about the town’s future – and there is a growing clamour for city status to be conferred on what is among the largest towns in the UK.
The Elizabeth Line, previously known as Crossrail, reaches Reading in 2019 and I wonder if that will be the point when our monarch will grant city status to the town – acknowledging that Reading really has arrived ...
The upbeat business environment in Reading shouldn’t mask the fact that the Thames Valley has many challenges – a theme taken up by Richard Baker, EY’s Reading office managing partner, in his article in this issue.
Yes, Oxford, Maidenhead and Slough are also thriving – but the infrastructure in the region needs more attention, whether digital or roads. The quicker we move things about – from data to motor vehicles – the faster our economy will grow.
• The Thames Valley Property Awards was a wonderful event again this year – see report from page 11 The 570 guests had a great night – even those who didn’t win – and we would like to thank all those who made TVPA such a success. A special mention to Basingstoke – winner of Town of the Year, an acknowledgment of how far the town has come, and is planning to go in the next few years.
David Murray Publisher
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businessmag.co.uk
Foreign investment is up – and Reading is top location
The South East (excluding London) recorded 73 foreign direct investment (FDI) projects in 2016; of which 74% were first-time investments in the region from international investors. This represents an 11% increase on 2015 when 66 FDI projects located in the region, following a decline of 10% on 2014.
According to EY’s latest annual Attractiveness Report, in 2016 the majority of UK regions saw an increase in projects, with just four seeing a decline when compared with the previous year: Wales, North East, North West and the South West. However, investors predict a decline in the UK’s future attractiveness as a destination for foreign investment.
Although Reading was the top location for attracting inward investment into the South East, with nine of the region’s 73 projects, no one city or town dominates and the projects are widely spread across the region. Slough was the second most attractive location with five projects, Oxford followed with four, and both Southampton and Guildford secured three projects. The geographic profile of the region’s FDI projects contrasts strongly with the North West where the main city of Manchester secured 52% of the region’s total projects.
Richard Baker, managing partner at EY across the Thames Valley and south, said: “2016 was something of a comeback year for inward investment into the South East, with the region attracting an increase of 11% more FDI projects than in 2015 – a decline of 10% on 2014.
“The Thames Valley attracted over a half (58%) of South East projects. This is reflective of the key strengths of the region (which includes Berkshire, Buckinghamshire, Oxfordshire and parts of Hampshire and Surrey) such as the existing business community, the mix of IP-rich, high value-add sectors and the universities, as well as international connectivity with Heathrow and proximity to London.
“However, the fragmented nature of the Thames Valley, and indeed wider South East, in terms of the spread of economic activity, business communities and public-sector bodies, can serve to dilute the brand and proposition for
investors. In addition, to maintain the region’s attractiveness, we need to address the challenges of skills, housing and congestion on our roads and rail systems.”
In the South East, strong growth came from two sectors in particular – financial and business services and manufacturing – with 26 and 22 projects respectively. The pharmaceuticals and life-sciences sector was the third largest provider of projects in 2016, which was unusual compared with other English regions.
The majority of investment in the South East originated from the US, with the number of US investments increasing by 18% to 26 projects recorded in 2016. Last year also represented a year when Irish projects increased significantly – six projects were recorded in 2016 compared to only a single project in 2015. All the FDI secured in the South East was generated from 23 different countries across the globe.
Brexit impact
55% of all FDI projects in the South East region were announced before the EU referendum vote in June 2016, with 45% announced after this date.
Global investors had mixed views when asked about the future attractiveness of the UK. 32% of respondents, surveyed between March and April 2017, say they expect the UK’s attractiveness to FDI to improve over the coming three years, while 31% expect it to decline. Both figures are significantly worse than recorded long-term averages of 53% and 8% respectively. In fact, since March 2016 the share of investors with a negative view of the UK’s medium-term prospects for FDI have almost doubled.
Baker commented: “The research suggests that the EU referendum vote and its aftermath may be having an influence on global perceptions of the UK’s medium to long-term attractiveness. Western European investors are twice as negative as Asian and North American investors.
“Decisions on the majority of investments made in 2016 would have been made up to three years ago, which helps to explain the UK’s solid performance last year, but signs of a slowdown are on the horizon.”
THE BUSINESS MAGAZINE – THAMES VALLEY – JUNE 2017
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