The Yorkshire and the Humber region secured 28 Foreign Direct Investment (FDI) projects in 2025, representing a 46% year-on-year fall and the region’s lowest total across the last decade, according to the latest EY UK Attractiveness Survey.

The EY 2026 UK Attractiveness Survey ranked 259 regions across Europe according to the number of FDI projects each attracted in 2025. The majority of UK regions saw FDI projects fall year-on-year in 2025, with only Greater London (5%), Wales (56%) and Northern Ireland (65%) seeing increases. The South West saw projects stagnate year-on-year, with all other regions seeing a decline. Greater London (279 projects), Scotland (108 projects) and the West Midlands (68 projects) were the UK’s top-performing regions for attracting FDI projects last year. Across the UK, 730 projects were secured in 2025, representing a 14% fall from 853 the previous year.

Yorkshire and the Humber’s FDI projects in 2025 were spread across a diverse variety of sectors. The Software and IT Services, Business and Professional Services, Machinery and Equipment, Transportation and Logistics, Agri-food and Construction sectors drove the region’s joint-highest number of projects (three each).

The region’s year-on-year fall in FDI meant that its overall share of UK projects fell from 6.1% in 2024 to 3.8% in 2025, however this remained slightly higher than the decade-low of 3.5% recorded in 2023.

Leeds was ranked the UK’s joint-seventh best-performing city outside London for securing FDI projects with a total of nine. This was down from 16 in 2024 when Leeds was ranked the UK’s fifth best-performing city outside the capital.

France ranked first in Europe in 2024 with 852 projects, a decline of 17% year-on-year. Meanwhile, Europe as a whole recorded a 7% year-on-year decrease in FDI projects as global economic uncertainty related to tariff disruption weighed on investment figures worldwide. Subdued economic growth, high energy prices and competition from other markets, such as Asia and the United States, are also thought to have impacted investment levels into Europe.

Kate Jarman, EY Leeds Office Managing Partner, said: “It was a challenging year for FDI across the region in 2025, particularly given the decline in projects was more pronounced in Yorkshire and the Humber than it was for the UK as a whole, highlighting room for improvement going forward.

“It’s encouraging to see that Leeds continues to be among the country’s top-performing cities for securing FDI projects, while manufacturing activity accounted for a significant proportion of Yorkshire and the Humber’s projects, building on the region’s strong industrial heritage. Yorkshire and the Humber also secured five projects announcing 100 or more jobs in 2025, which underscores the region’s continuing ability to attract high-value projects.

“EY’s investor sentiment survey revealed that access to a skilled workforce, the strength of local transport and infrastructure and access to regional grants and incentives are top priorities for global investors when considering locations outside of London. This should provide useful insight for both businesses and policymakers in Yorkshire and the Humber, particularly if the region is to close the growing gap with Greater London from an FDI perspective.”

Manufacturing, business services were top FDI activities for Yorkshire and the Humber in 2025

The number of jobs created by FDI projects in the region fell to 1,164 in 2025, down by a significant 73% from the 4,247 recorded in 2024. The region was ranked ninth in the UK for FDI-related employment last year, down from fourth in 2024. Yorkshire and the Humber secured 4% of total UK FDI-related employment last year, down from 11.1% in 2024.

Examining FDI by activity reveals that the majority of Yorkshire and the Humber’s FDI was driven by projects involving manufacturing (11), followed by business services (7) and logistics (5) activities. FDI in the region driven by manufacturing (-54%) and business services (-46%) activities was down year-on-year, while FDI related to logistics activity stagnated.

New projects in the region also fell year-on-year

‘New’ projects – as opposed to re-investments or extensions – are one way of assessing a country/region’s ability to attract fresh investment. For the fourth consecutive year, the UK remained Europe’s leading destination for new FDI projects, ahead of Germany.

In 2025, Yorkshire and the Humber recorded 16 new projects, down 20% from 2024, when 20 projects were recorded. As a result, the market share for new projects secured by Yorkshire and the Humber decreased to 3.4% in 2025, down marginally from 3.7% the previous year.

Of the UK’s 730 total FDI projects in 2025, 474 (65%) were new. While the number of new projects declined by 11% compared with 2024, this fall was broadly in line with the wider European trend, where new projects across the region declined by 12% year on year.

US remains the leading origin of Yorkshire and the Humber FDI

The United States (US) has been the leading origin of Foreign Direct Investment projects into Yorkshire and the Humber over the last decade by a significant margin, accounting for 28.1% of projects.

In 2025, the importance of the US as an origin for Yorkshire and the Humber’s FDI projects remained significant, contributing 17.9% of the investment projects into the region (5 projects out of 28), albeit this was down considerably from the 2024 share (40.4%).

The US was a proportionately lower origin of investment in Yorkshire and the Humber than the UK as a whole in 2025, with the US accounting for 24.5% of investment projects into the UK (based on 179 US projects out of a UK total of 730).

Over the last 10 years, 10.9% of projects into Yorkshire and the Humber originated from Germany. This proportion of project successes has resulted in German-origin projects becoming the second most prevalent investments for the region over the last decade. However in 2025, Germany accounted for just two investment projects, a slight increase from only one project recorded in 2024.

Peter Arnold, EY UK Chief Economist, said: “While London outperformed the broader European trend in 2025 and remains a highly attractive global investment hub, FDI activity across much of the UK was more subdued. No English region outside the capital recorded growth, and while Wales and Northern Ireland saw year-on-year increases, their overall totals remain significantly below the UK’s traditional investment hubs. This widening gap between London and the rest of the country risks reinforcing long-standing regional disparities.

“Against a backdrop of more cautious global investment flows, the UK must sharpen its focus on where it can compete most effectively and deliver long-term value. Addressing structural barriers - including high energy and labour costs - will be critical to better insulating the economy from ongoing uncertainty. Strengths in sectors such as technology, professional services and financial services remain a clear advantage, but this needs to be complemented by stronger performance in high-value, productivity-enhancing areas such as advanced manufacturing and life sciences. Strengthening regional investment propositions through improved connectivity, workforce capability and a stronger pipeline of investable projects will be essential to translating investor interest into sustained, nationwide growth.”

Skills, grants and infrastructure key for investors when considering locations outside London

EY asked investors to outline the most important factors they considered when deciding whether to invest in locations outside London. The highest number of responses included the availability and skills of the local workforce (30%), followed by access to regional grants and incentives (27%), strength of transport infrastructure (27%) and the cost and availability of local real estate (26%).

Other important investment criteria included the availability of business partners and suppliers, and access to specialised industry clusters (both 21%).