By Scott Wright
FOREIGN direct investment into Glasgow has plunged by more than 90 per cent since the pandemic took hold in March, bringing a four-year period of growth to an end.
But there are hopes of a gradual recovery this year and next, based on United Nations forecasts.
Figures released by Glasgow City Council underline the impact of the pandemic on inward investment to the city, as restrictions continue to limit investors’ ability to travel, and large real estate trade shows that traditionally yield enquiries, such as the MIPM exhibition in Cannes, remain in cold storage.
FDI fell by 91% to £35.7 million in the first three quarters of the 2020/21 year, compared with £401.6m for the same period a year earlier, as the pandemic put the brakes on activity.
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The decline followed sustained growth in FDI between 2016/17 and 2019/20, with 12,000 new jobs created, according to a report presented to the council by its Invest Glasgow team this week.
The report found that 2019/20 was the most successful year of that period, with 3,619 jobs coming to the city through FDI.
Nearly £1.2 billion of FDI has been attracted since Invest Glasgow was set up in 2012 with the aim of raising the city’s investment and business profile, the report found.
The contribution of the Invest Glasgow team was cited in securing investment from US banking giants JP Morgan and Morgan Stanley, which between them have created around 4,000 jobs in the city. Canada, Germany, France, Italy, Switzerland and the US are among the countries that have invested most in Glasgow, which ranks third in the UK for FDI, in recent years.
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The report cites the United Nations Conference on Trade and Development, which notes that while worldwide flows of FDI have fallen by 40% since the outbreak of the pandemic, the rate of decline is forecast to slow to between 5% and 10% this year. It is hoped there will be a “bounce-back” in 2022.
Susan Aitken, leader of Glasgow City Council, said: “Our Invest Glasgow team continue… to do a fantastic job in attracting the type of investment that is a key part of our future economic growth. By adopting appropriate measures at this time, they can ensure that the city remains a leading destination for FDI from all over the world, with all the benefits this brings to Glasgow.”
In response to the pandemic, the Scottish Government has launched a new inward investment plan that the council says aligns with its priorities.
New working methods have been introduced by Invest Glasgow to meet the challenges brought by restrictions. Webinars, online events and virtual tours are expected to replace overseas trips by the Invest Glasgow team in the short-term.