Key Points
- Confidence among foreign investors across the North East has experienced a downward trend, impacting local city standings.
- The Investor Confidence Index, compiled by the Centre for Economics and Business Research (Cebr) for Irwin Mitchell, evaluated 48 UK cities and regions regarding their international appeal.
- Newcastle dropped two places down to 27th position, registering an overall index score of 32.2.
- Sunderland remained positioned near the bottom tier of national locations, securing 43rd place with a score of 24.5.
- Official figures show that the UK secured 1,020 foreign direct investment (FDI) projects during 2025/26, marking a 25.8% decrease from the previous year, with the North East attracting 23 of them.
- Bryan Bletso, head of international at Irwin Mitchell, noted that while the region possesses strong industrial capabilities, more work is required to ensure these translate into a competitive proposition.
Newcastle (Newcastle Times) September 30, 2026 – Foreign investor confidence within the North East has suffered a noticeable setback, with Newcastle dropping in national attractiveness rankings and Sunderland maintaining one of the lowest positions across the United Kingdom, according to recent findings.
- Key Points
- How Did Newcastle and Sunderland Perform in the Latest Investor Confidence Index?
- What Were the Specific Pillar Scores for Newcastle and Sunderland?
- What Did Industry Experts Say About the North East’s Economic Potential?
- How Will Devolved Powers Impact Future Regional Investments?
- Background of the Investor Confidence Index
- Prediction: How This Development Can Affect the North East Business Community and Local Workforce
How Did Newcastle and Sunderland Perform in the Latest Investor Confidence Index?
The Investor Confidence Index, which is compiled by the Centre for Economics and Business Research (Cebr) in partnership with law firm Irwin Mitchell, evaluated 48 UK cities and regions to determine their core appeal to international investors.
As reported by The Northern Echo, Newcastle ranked 27th overall with a score of 32.2, representing a decline of two places compared to the previous assessment. Meanwhile, neighbouring Sunderland was positioned further down the table at 43rd place, recording a score of 24.5.
The evaluation framework assessed locations across multiple performance indicators, including growth potential, local workforce skills, and physical infrastructure. Government figures cited alongside the report indicated that the wider UK secured 1,020 foreign direct investment projects in the 2025/26 period—a 25.8% drop compared to the preceding year—with the North East region securing 23 of those total projects.
What Were the Specific Pillar Scores for Newcastle and Sunderland?
A closer examination of the index metrics reveals distinct variations in how both North East cities performed across individual pillars.
Newcastle recorded its strongest performance in local infrastructure, achieving a score of 44.2. This was followed by a score of 27.3 for growth potential and 25 for local skills.
Sunderland also registered its highest score in infrastructure at 39.3, alongside 26.8 for growth potential and 7.3 for skills. Discussing these regional metrics, Bryan Bletso, head of international at Irwin Mitchell, stated that
“The Index highlights differing strengths across the region”.
Bryan Bletso of Irwin Mitchell further explained that
“Newcastle recorded its strongest score in Local Infrastructure, while Sunderland’s highest scores were in Growth Potential and Infrastructure”.
What Did Industry Experts Say About the North East’s Economic Potential?
Despite the dip in rankings and tighter investment conditions, analysts pointed out that the region retains fundamental economic assets that continue to interest international markets.
Bryan Bletso of Irwin Mitchell stated that
“The North East has many of the characteristics international investors look for, including strong industrial capabilities, an increasingly innovative economy and significant long-term growth potential”.
However, Bryan Bletso of Irwin Mitchell added a note of caution, stating that
“However, the rankings show there is more to do to ensure those strengths translate into a consistently competitive proposition for international businesses”.
Addressing the broader economic landscape, Bryan Bletso of Irwin Mitchell noted that
“The Government’s devolution agenda creates an opportunity for regions to take greater control over the factors that influence economic growth”.
Bryan Bletso of Irwin Mitchell also emphasized that
“However, attracting investment ultimately depends on turning those powers into tangible improvements that businesses can see on the ground”.
He further noted that
“That means continuing to develop the skills, infrastructure and investment-ready opportunities that give places a competitive advantage”.
How Will Devolved Powers Impact Future Regional Investments?
The release of the index coincides with a period of administrative transition in the region, as the North East Mayoral Combined Authority assumes expanded responsibilities over local transport networks, workforce skills development, and economic strategy.
According to Irwin Mitchell’s analytical commentary, localities that successfully leverage newly acquired devolved powers to upgrade local skills, modernize infrastructure, and prepare investment-ready sites will be best positioned to reverse downward trends and capture future foreign direct investment.
Concluding the assessment on regional leadership, Bryan Bletso of Irwin Mitchell stated that
“Regions that combine strong local leadership with effective delivery are likely to be best placed to attract new investment”.
Background of the Investor Confidence Index
The Investor Confidence Index is an analytical benchmarking tool developed by the Centre for Economics and Business Research (Cebr) in collaboration with Irwin Mitchell. Designed to track the attractiveness of UK towns, cities, and regions to foreign direct investment (FDI), the index measures underlying economic fundamentals rather than short-term market fluctuations. It systematically evaluates participating locations across vital pillars—primarily local infrastructure, economic growth potential, and workforce skills—to provide policymakers, local authorities, and commercial stakeholders with an empirical overview of regional competitiveness. Over successive releases, the index has served as an essential barometer for monitoring how shifts in national economic policy, regional devolution, and global market conditions influence investor sentiment across different parts of the United Kingdom.
Prediction: How This Development Can Affect the North East Business Community and Local Workforce
The decline in investor rankings and the broader drop in foreign direct investment projects present significant implications for local businesses, regional suppliers, and the workforce across Newcastle, Sunderland, and the wider North East. When international investment slows down, local supply chains, commercial property developers, and high-growth technology or manufacturing firms often experience constrained capital inflows, which can moderate job creation and wage growth.
However, because the report highlights infrastructure readiness as a relative strength for both Newcastle and Sunderland, the ongoing transfer of powers to the North East Mayoral Combined Authority offers a timely window for intervention. If regional leaders utilize these devolved competencies to directly address persistent skills gaps—particularly in lower-scoring categories—the local economy can enhance its competitive edge. For the local workforce and regional enterprises, effectively translating these strategies into on-the-ground improvements will be critical to retaining talent, boosting business confidence, and signaling to international markets that the North East remains an adaptable and lucrative destination for long-term capital deployment.
