Number of FDI projects in Northern Ireland fell last year, but report finds US investors largely unfazed by Brexit

Economy Minister Diane Dodds with Invest NI boss Kevin Holland in New York earlier this year with Riskonnect's Andrea Brady, announcing plans to create 100 jobs in Northern Ireland. Picture: Kelvin Boyes

THE number of foreign direct projects in Northern Ireland fell by 15 per cent last year, but a new survey from EY suggests overseas investment should remain relatively resilient despite the impact from coronavirus.

A total of 28 FDI projects were recorded in 2019, compared with 33 in 2018. Half the projects were new arrivals, with the rest accounting for expansion of existing projects.

The growing size of Belfast’s cyber-security hub contributed to a greater concentration of FDI investment in the city.

Belfast secured 22 new projects last year, ten per cent more than in 2018, putting it fourth on a list of UK ‘core cities’. Four out of every five FDI projects in Northern Ireland are now concentrated in Belfast.

The number of FDI projects in the Republic also fell in 2019, although EY’s report said the 191 recorded last year followed “an exceptionally high” 2018 figure of 205.

After three years of a declining European market share since the 2016 EU referendum, the UK recorded a five per cent increase in inbound FDI projects in 2019.

But the UK still lost its top spot in the European table of inbound FDI projects for the first time since the survey started in 1997.

Despite the fall in projects on the island of Ireland last year and the recent impact from the Covid-19 pandemic, financial services giant EY has surmised that the north should should remain attractive for FDI this year.

A UK-wide survey found that 65 per cent of planned projects were still going ahead.

“Probably like the Republic, the profile of investment into Northern Ireland is quite specialised in what we would call high valued-added services, areas like digital, finance, information, comms and media,” said EY Ireland’s head of FDI, Feargal De Freine.

“That constituted four fifths of the investment into NI in 2019 and that is considerably higher than the European average, which is down at 44 per cent.

“That tells us that the nature of the investment into Northern Ireland is in an area that will be of increasing importance as we look beyond Covid-19.”

Mr De Freine stressed that the US remains a very important source of investment for the whole of Ireland, adding that American investors do not appear “spooked” by Brexit.

He added that Northern Ireland’s post-Brexit status puts itself in “a really interesting” position to attract FDI in future.

Some of the biggest FDI announcements last year included Georgia insurance giant Aflac, Texas medical-tech firm ESO and California’s Constrast Security, which all announced plans to create between 120 and 150 jobs in Belfast.

Michael Hall, managing partner of EY Northern Ireland, said: “Brexit appears to be having little impact on US investors across the UK and there is the possibility that NI will present a unique investment opportunity when the UK leaves at the end of the year. This depends upon what form of agreement is reached and the specific treatment of NI within that.

He added: “The evolution of FDI we are seeing across the UK is very evident in Northern Ireland. The emergence of clusters in film and media, cybersecurity and legal services in recent years typify this transformation. This is incredibly helpful with the twin challenges of Covid and Brexit creating a less ideal investment environment.”

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