Are Coventry’s economic prospects improving?

Based on data released by the Department of Business and Trade, the Coventry and Warwickshire area continues to be the best-performing location in the UK in terms of attracting foreign direct investment (FDI).  

From 2023 to 2024, it experienced a total of 53 foreign investment projects, which outperformed general UK figures on a per capita basis. Strong performance was also noticeable in the visitor economy and employment figures of the area, but what factors are leading to these improvements, and how sustainable are they?   

Focusing on foreign-funded projects, key investments were made in the automotive and future mobility sectors with 22 projects in total, which showcased growth from the 17 projects in the previous period. Other key investment areas included digital software, e-commerce, and medtech. In total, there was one FDI project per 21,464 individuals, making both the city and county leading FDI destinations. Its leading role is also evident considering figures over the last decade – the county has seen 447 FDI projects over the last ten years.

Coventry’s success in attracting foreign direct investment was also recognised by FDI Intelligence Magazine, which ranked the area in the top 10 for three categories in its annual FDI European Cities and Regions of the Future Awards 2024. These categories included business friendliness, FDI strategy and economic potential.   

Councillor Jim O’Boyle, who is the Cabinet Member for Jobs, Regeneration and Climate Change at Coventry City Council linked Coventry’s economic future to the incoming green industrial revolution and shared his positive expectations on employment figures in the energy sector.   

 Coventry’s business confidence score rose from 70.7 to 77.1 in the service sector, while it jumped from 59.5 to 80.5 for manufacturing

In addition, Coventry has experienced growth in its tourism industry. The data shows that the visitor economy grew by more than £100 million in 2023 compared to the previous year. This is not only a post-pandemic ‘comeback’, but a longer-term trend. Compared to 2019 figures, the number of visitors to the city increased by more than a million in 2023, which marked a new record of 11.39 million tourists. The value of the visitor economy also experienced an increase to a record £855 million in 2023. The representative from the City Council attributes the rise to the changes made in the city throughout the past few years, including refurbished heritage venues and the redeveloped railway station.   

Furthermore, the city and county have demonstrated strong performance in employment growth and job creation. Recent figures show a 71.9% employment rate in this area, and more jobs and economic growth are expected to come. In fact, 25,431 new jobs were created in Coventry and Warwickshire over the last ten years, and this trend is expected to continue due to increasing FDI levels. According to The Coventry and Warwickshire Chamber of Commerce’s latest Quarterly Economic Survey (QES), despite small fluctuations, Coventry also experienced a rise in business confidence in both services and manufacturing sectors in 2024. Coventry’s business confidence score rose from 70.7 to 77.1 in the service sector, while it jumped from 59.5 to 80.5 for manufacturing.

[Coventry’s] future economic landscape largely depends on whether it manages to become a hub of green energy production

Despite positive changes in employment and job creation, the area has seen a rise in unemployment, according to 2023 figures from the Office for National Statistics. However, it is argued to be due to people coming back to the labour market and, in fact, economic inactivity levels show a decline from 24.3% to 22.4% in 2023.

Overall, the Coventry and Warwickshire area exemplifies industrial growth coupled with the expansion of the service sector, fostering positive expectations about its future economic conditions. In particular, the leading FDI figures are informative about its potential to grow and its preferable environment for business activity. Coventry has a long history of industrial manufacturing, and its future economic landscape largely depends on whether it manages to become a hub of green energy production, including batteries for electric vehicles.