SCOTLAND won a record number of inward investment projects last year, with its rise in contrast to a decline in the UK as a whole, a key survey published today reveals.

A record 126 inward investment projects were secured by Scotland in 2022, up from 122 in 2021, maintaining the nation’s position as the top UK location for foreign direct investment (FDI) outside London, according to accountancy firm EY’s latest survey.

The 3.3% increase in the number of projects secured by Scotland was in contrast to a 6.4% decline in the UK as a whole. UK-wide, the number of FDI projects won fell from 993 to 929, EY’s Scotland attractiveness survey shows.

Scotland also set a new record for its share of the inward investment projects won in the UK, at 13.6% in 2022. This was up from 12.3% in 2021 and 11% in 2020.

Among investors, Scotland polls as the most attractive place in the UK to invest after London.

The survey found 19.2% of investors considering FDI locations intend to establish or expand operations in Scotland in future. This is an all-time high for Scotland.

Edinburgh and Glasgow ranked as the first and second cities outside London for planned investment over the next year, the survey reveals.

Digital technology and utilities, including renewables, featured prominently in FDI wins for Scotland last year. And manufacturing FDI in Scotland was at its highest in a decade.

The survey shows 2022 was the second consecutive year in which Scotland outperformed the UK-wide showing and Europe as a whole, with its 3.3% advance in the number of FDI projects won. Europe recorded a 1% increase in the number of FDI projects secured.

While London remains the UK’s most attractive location to future investors, Scotland is in second place, EY notes.

The survey shows that 11% of investors rate Scotland as the most attractive place to establish operations in the UK. EY notes this is down from a record high of 15.8% in its attractiveness survey published last year but that it is higher than Scotland’s pre-pandemic score of 7% in 2019.

EY Scotland managing partner Ally Scott said: “Scotland put in another powerful performance on FDI in 2022, securing record inward investment projects and UK market share.

“Our report underlines the rich dynamism, diversity and balance of the Scottish economy and FDI sector - qualities that we at EY Scotland see every day.”

Referring to Glasgow, Edinburgh and Aberdeen, he added: “For Scotland to have three cities in the UK’s top five for non-London FDI bears testament to Scotland’s enduring attractiveness, and all this adds up to an impressively resilient performance.”

EY noted the US had been the “leading country of origin” for Scotland, the UK and Europe throughout the past decade for FDI.

Scotland secured 32% of its inbound projects from the US in 2022. In the UK as a whole, the US accounted for 24% of FDI projects won.

EY chief economist Peter Arnold said: “Scotland continues to consolidate its already well-established position as the most attractive UK location for FDI outside London. What’s more, London’s lead narrowed significantly this year, as its projects declined by almost a quarter. And it was telling that most other UK regions recorded an increase in projects, suggesting that levelling up may increasingly be becoming a reality in FDI."

He added: “Expertise in manufacturing and utilities – key sectors in Scotland – will be crucial to any efforts by the UK to establish itself as a place where clean technology is not just deployed, but also developed and built too. The UK’s green ambitions should go hand in hand with its levelling-up goals, and investment in clean technology means investment in the UK’s industrial heartlands.”