Despite Turbulence: a positive outlook on the UK Investment Climate

11/05/2018

Reclining in my seat as the broad shouldered 737 lumbered towards its take off position at John F Kennedy airport, I reflected on my trip to New York City triggering thoughts on why Britain really is Great Britain. Perhaps, I thought, I was not being balanced and my desire to see Terminal 5 was a childish petulance borne out of a long immigration queue that greeted my arrival in America some 20 hours prior; however, my overall reflection was of shock at the general state of the fabric and infrastructure of this intimidating metropolis. As the plane stood ready to launch us back to the comfort of a well-oiled version of NYC, our Captain announced that a strong tail wind would propel us to London in a little over five hours, but the cost would be some severe turbulence en route. How appropriate that phrase ‘severe turbulence’ is when considering the UK Investment Climate today!

Over the last 16 years, I have concluded that the investment climate and the attractiveness of doing business in the UK is driven by two main factors; the rule of law and our education system. Of course, there are many more additional factors that will relate to circumstance, but I firmly believe these two dominate. Despite the severe turbulence that the UK is facing today, I fundamentally believe the UK remains one of the most attractive countries in the world to invest. Indeed, when speaking to our Chinese Clients their enthusiasm for investing in Europe is today unparalleled – but when you dig a little deeper you realise that their focus and landing point remains the UK – despite our turbulence.

The attractiveness is not just centred on our iconic Capital but is a general enthusiasm for British opportunities. On a recent visit to Exeter and the South West, I was amazed to understand how powerful the local economic energy is – Bristol and Exeter are listed in the top 5 GVA growth until 2020 at 2.3% GVA, ahead of London at 2.2% GVA. The changing demands from the workforce for an improved quality of life paired with improved opportunities are drawing skilled professionals from London. The power of the provinces in our small (although in size alone) nation is being replicated across the country helping the equilibrium of inward investment.

Despite the period of turbulence, the UK appears to be more attractive than ever as an investment destination in an uncertain world. Our desire, need and want to improve the fabric and infrastructure of this country is unquestionable and the opportunity clear. Our housing requirement along the spectrum is hugely underserved, which in many cases is extremely distressing, but creates a public-sector problem requiring a private sector solution. Our manufacturing industries are enjoying a renaissance and our service sector is booming – not to mention our education system being an export commodity.

Importantly, Clients from across the globe are showing a determination to invest in the UK and their intent, whilst perhaps conditioned by some caution, is clear and if anything, more committed than ever. The UK has its problems and challenges and no doubt the ‘B’ word will ensure our own turbulence will persist. However, against the complex global backdrop, I believe there is reason for a positive outlook and a bright road ahead.

This article was written by Martin Bellamy, Salamanca Group CEO and Chairman.

This article is part of our May 2018 Group Newsletter

To read the PDF version online, click here, or to read another article online, please follow one of these links:
Doing business with China – the importance of knowing the decision maker by ShaRon Kedar
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