The latest EY UK Attractness Survey and Irwin Mitchell’s Index both show the North East investment story slipping again in 2025, with regional foreign direct investment (FDI) project numbers dropping sharply.
FDI figures mask deeper value
Raw counts of new overseas projects are volatile for a region the size of the North East. A single large announcement can skew yearly totals, and many investment values remain undisclosed. Because of this, the headline “down” does not tell the whole story.
What matters more is the multiplier effect generated by anchor projects in offshore wind, battery manufacturing and clean energy. Those initiatives, especially around the Teesside Freeport and the Northumberland‑Tyneside Investment Zone, drive supply‑chain spend, skills development and follow‑on investment that often show up as leases, site assemblies and local contracts rather than press releases.
Local SMEs are the other engine
The region’s small‑ and medium‑sized enterprises sit on the high street, in business parks and industrial estates, employing the bulk of the workforce. Evidence shows that firms which scale achieve noticeably higher productivity, and scaling depends on access to suitable premises, financing and timely advice.
Relying solely on attracting outside capital therefore addresses only half of the growth equation. A broad strategy must also help SMEs secure fair rent reviews, negotiate lease renewals and find new premises for expansion.
From a practical standpoint, the North East Mayoral Strategic Authority’s £4.4 billion investment prospectus illustrates this dual approach.
It outlines industrial, commercial and residential opportunities across more than 18 billion square feet of sites, while the area continues to record one of the highest FDI jobs‑per‑capita rates in the UK.
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Recent deliveries include an £11.3 million commitment to the NETPark phase in County Durham, a £2 billion Mayoral Development Zone in Newcastle and Gateshead, a £1.85 billion transport settlement for the first Tyne and Wear Metro expansion in three decades, and a £22 million housing programme targeting over 1,100 homes on brownfield and stalled sites.
These projects rely on agency, valuation and lease advisory expertise to turn ambition into concrete transactions.
Meanwhile, the Tees Valley Combined Authority reports a £160 million Investment Zone partnership with Teesside University that fuels innovation clusters in Hartlepool and Middlesbrough, including new production and studio space at Northern Studios.
They drive local employment.
The area does not need to choose between courting foreign investors and bolstering home‑grown firms. Instead, it requires a unified ecosystem of advisors, operators and authorities that can manage both sides of the equation.
Future coordination of these efforts could smooth the volatility seen in annual FDI counts, turning headline declines into a more detailed picture of sustained local growth.
Kevan Carrick, co‑founder of JK Property Consultants LLP and chair of the North East Business and Innovation Centre, notes that the region’s investment narrative “will continue to prove much stronger than the headlines suggest.”