Despite fears of recession, the UK has been identified as the third most popular place for investment this year in a survey of thousands of business chiefs across the world.
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Conducted by PwC and unveiled at the World Economic Forum in Davos, the survey of more than 4,400 chief executives in 105 countries found that only China and the US were viewed as more attractive investment propositions than the UK, which tied for third place with Germany.More international trade and investment news from Relocate Global
UK’s appeal as international investment destination grows
The Global Growth Priority Table showed the UK’s appeal as an investment location had doubled over the past three years with almost a quarter of executives now wanting to expand investment in Britain – up from nine per cent in 2020.Kevin Ellis, chairman and senior partner at PwC UK, commented: “CEOs don’t expand and invest on a whim – they’re choosing the UK as that’s where they expect to see returns.“That choice will be based on sector strengths in areas like AI and biotech, alongside our people-first, business-friendly environment.“To keep the UK attractive, we need renewed focus on skills and regional growth – both of which will help unlock productivity.”
Huge change – but more needed
Mr Ellis pointed out that businesses had already undergone “massive change” this decade, with hybrid working and cloud computing among the biggest changes.“But,” he added, “this is the tip of the iceberg – many CEOs believe their current business models are unsustainable and this means more change ahead.“This isn’t about tinkering but fundamental changes requiring big investment in people, skills and technology. It’s positive businesses are focused on making the changes needed, despite challenges including inflation and skills shortages, which could be overwhelming.”
Business confidence growing in UK
Kitty Ussher, chief economist at the Institute of Directors, pointed out that research last month showed that UK business leaders’ investment plans were stronger in December than they had been at any time in the previous six months.“It is good to see that this is reinforced by growing confidence in the UK at a global level,” she told City AM.Claire Harding, research director at the Center for London, added: “Despite the huge challenges of Brexit and the pandemic, it’s great to see that the UK is succeeding and that London is retaining its status as a global city.”
UK regions on the rise
Publication of the PwC survey coincided with a report from NatWest bank showing that London was out-performing the national economy and could avoid what economists believe could be a lengthy, if shallow, recession.London’s rating in NatWest’s Index of Business Output jumped to 50.2 in December – up from 48.2 – in an index where any figure above 50 indicates growth. Wales was the only other region or nation to record expansion, although from a much smaller economic base than the capital’s.Recent figures from the London Chamber of Commerce and Industry showed that about 25 per cent of the capital’s firms tried to take on more staff last quarter of 2022, the highest proportion since the chamber started collecting data.The NatWest report, based on a purchasing managers’ index, found that the majority of UK regions and nations were being affected by an economic slowdown.“More positively, pressure on demand from sharply rising prices eased somewhat, with the survey’s measures of inflation retreating further from their recent record highs,” NatWest said. “Of the 12 UK regions and nations monitored, only Wales and London recorded a rise in business activity in December, while the North West saw no change.“This, nevertheless, represented an improvement from the broad-based decline seen in November.”Sebastian Burnside, NatWest chief economist, said that for most of the UK, 2022 had ended “disappointingly”. This, he pointed out, was in stark contrast to the first two months of the year – before the Russian invasion of Ukraine – when there was broad-based growth and “sky-high”, post-pandemic business confidence.He added: “Price pressures reached new heights in 2022, with every nation and region seeing record increases in average charges for goods and services at some point during the year.“Positively, underlying price pressures have begun to cool, with rates of business cost inflation slowing to multi-month lows in all areas in December.”Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.
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