Confidence in the North East among foreign investors has fallen, with Newcastle slipping in a national ranking and Sunderland still among the UK’s lowest-rated locations, according to new findings.
The Investor Confidence Index, compiled by the Centre for Economics and Business Research for Irwin Mitchell, ranked 48 UK cities and regions on their appeal to foreign investors.
Newcastle ranked 27th with a score of 32.2, down two places on last year, while Sunderland was 43rd with 24.5.
Bryan Bletso, head of international at Irwin Mitchell, said: "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, the rankings show there is more to do to ensure those strengths translate into a consistently competitive proposition for international businesses."
The index measured growth potential, skills and infrastructure.
Newcastle scored highest for infrastructure, with 44.2, followed by 27.3 for growth potential and 25 for skills.
Sunderland scored 26.8 for growth potential, 7.3 for skills and 39.3 for infrastructure.
The report comes after a tough year for inward investment.
Government figures show the UK secured 1,020 foreign direct investment projects in 2025/26 — down 25.8 per cent on the previous year.
The North East attracted just 23 of them.
Mr Bletso said: "The Index highlights differing strengths across the region.
"Newcastle recorded its strongest score in Local Infrastructure, while Sunderland's highest scores were in Growth Potential and Infrastructure.
"The Government's devolution agenda creates an opportunity for regions to take greater control over the factors that influence economic growth.
"However, attracting investment ultimately depends on turning those powers into tangible improvements that businesses can see on the ground.
"That means continuing to develop the skills, infrastructure and investment-ready opportunities that give places a competitive advantage.
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"Regions that combine strong local leadership with effective delivery are likely to be best placed to attract new investment."
The report comes as the North East Mayoral Combined Authority takes on more responsibility for transport, skills and economic development.
Irwin Mitchell’s analysis says regions that use devolved powers to improve skills, infrastructure and investment-ready sites will be best placed to attract foreign investment.
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