Foreign investment in Birmingham has soared by 52 per cent in the last year – with more than 2,200 jobs created as a result – as the city continues to buck a UK-wide fall.

The city attracted 41 foreign direct investment (FDI) projects in 2012/13, which directly created 2,271 positions and safeguarding more than 4,000, and inward investment group Marketing Birmingham said the activity boosted the city’s economy by £174 million.

Birmingham has been boosted by thousands of jobs created in the engineering sector – driven by Jaguar Land Rover and Shanghai Automotive – while the key growth sectors of digital media and life sciences each accounted for 10 per cent of investment.

The US is the largest investor in Birmingham – accounting for 27 per cent of companies locating in the city in the last 12 months, followed by Australia and India.

Wouter Schuitemaker, investment director of Business Birmingham, the city’s inward investment programme launched in 2011, said that after a dip in investment from abroad in its early days the city is punching above its weight.

He said: “We are now starting to see the kind of figures that represent Birmingham in the manner it should be.

“I think we will see when the UKTI figures come out that the LEP area will post one of the largest amounts of growth.

“And the projects that we have delivered will be but there with all of the other major areas. Clearly London is a case of its own, but compared to Manchester or other cities in the UK in job creation levels we have headed the pack.”

The rise in foreign investment comes a year on from Birmingham revealing a 37 per cent increase in inward investment projects during 2011/12 against a national decline of two per cent across the UK.

The UK Trade and Investment has not yet published its country-wide foreign investment data, but Mr Schuitemaker said he was confident that Greater Birmingham would post among the strongest growth.

The six sectors targeted for investment by Business Birmingham accounted for four in every five investments in 2012/13. They are advanced engineering, professional and financial services, digital media, life sciences, food and drink and IT.

The engineering sector accounted for 42 per cent of the city’s investment projects, on the back of JLR’s growth, the expansion of Shanghai Automotive’s European Design Centre and a new manufacturing hub for Australian packaging company TNA.

Other major projects included German prosthetics company Otto Bock Healthcare moving into Minworth Trade Park and Australian online retailer Tinyme setting up its UK base at the Innovation Birmingham Campus.

The city has also benefited from hundreds of jobs being created at Deutsche Bank. While the German bank has remained tight-lipped on its city investment, it has grown its employment in the city to more than 1,000, the Post recently reported it had set up a trading floor and reports claim it is set for a move to a 250,000 sq ft hub in Brindleyplace.

Mr Schuitemaker said there was a lot of interest from the financial services sector in setting up operations in Birmingham, which is comparatively cheaper than London.

He said: “Financial services continues to be a real area of success for us. We are now as a city looking at the specific functions of different operations that we can house in the city on the back of the Deutsche Bank example.

“We are looking at insurance and legal, and the type of operation where they could set yo a lower-cost centre. It is down to a number of things – the pressure on partners to create a return in this tough environment and the aount of clients saying we need the oursourcing facility onshored and close to London. This works heavily in Birmingham’s favour.”

Companies from 15 countries have located or expanded in the city last year, including French spraying manufacturer Exel Industries; Canadian serious games developer Ayogo, and US-headquartered online marketing specialist ReachLocal.

While the US has been targeted by Business Birmingham, the city continues to have success in attracting European investment.

Between 2008 and 2012 Birmingham has created about 12,000 jobs through European FDI – which is the most of all UK regions, with Belfast the next at about 7,700.

Sir Albert Bore, leader of Birmingham City Council, said that he expected even more jobs to follow as a result of the foreign investment.

He said: “Much work has gone into developing Birmingham’s profile and potential as an international business city over the last few years. As the figures show, we are beginning to see it translate into new investments and jobs in our local economy.

“These investments are hopefully just the beginning for companies that could grow to employ thousands of people, boost the skills of our workforce and create clusters of excellence that will attract even further investment here.”

Mark Gregory, chief economist at Ernst & Young, who specialises in inward investment, said Birmingham had been outperforming the market for the past two years.

He said: “At a macro level the motor industry is doing well and dragging in suppliers around that, and Birmingham has benefited.

“What we are seeing in manufacturing is there is a new opportunity as jobs are starting to move from the Far East because the Chinese economy is shifting, and we have seen a renaissance in manufacturing in the US as a result.

“The opportunity is there but you have to have the skills available.”

Birmingham Chamber of Commerce chief executive Jerry Blackett said Birmingham has a growing reputation as a centre for attracting inward investment.

He said: “We live in a global world and economy and it is important that we are well placed to attract investment from all over the world. It does secure jobs here and it is important to have the right mix of companies.”

CASE STUDIES

Ayogo

Canadian games developer Ayogo has joined the city’s digital community by moving to the Custard Factory.

Vancouver-based Ayogo uses game psychology and social software to motivate people with chronic conditions to achieve long-term behavioural change.

The company produces games such as Diabesties, a free mobile health app that enables friends with diabetes to share real-time peer support, while recording their blood glucose data.

Phillip Barratt, vice president, customers and partners at Ayogo, said: “By establishing Ayogo UK in Birmingham, we are able to take advantage of the skilled talent from the local digital media industry, a potential customer base of hundreds of life sciences companies in the region, and benefit from its accessible location within the UK and out to Europe.”

ReachLocal

Online marketing specialist ReachLocal is headquartered in California, USA, and has four offices in the UK.

The NASDAQ-listed company has expanded its presence in Birmingham during the last 12 months – after arriving in the city in 2010 with six members of staff, it now employs 18 people and has moved to bigger offices in Fort Dunlop.

Regional sales manager Craig McNerlin said: “ReachLocal has account managers for all of our clients, and it is vital that we can reach them quickly and easily. Birmingham’s central location made it ideal for our sales team, and our office in the city has become a catalyst for the company’s UK growth.

“We can also find the staff we need here. Almost everyone based in the office lives locally, even though we have a national remit.

“The transition from offline to online marketing means that ReachLocal is expanding swiftly, and our Birmingham office is certainly mirroring this trend.”

Tinyme

Tinyme, which sells personalised gifts for children, was formed in 2006 and is headquartered in Melbourne.

Having entered the UK market in 2011 through the launch of its website, tinyme.co.uk, the company has set up a customer service base in Birmingham Science Park to provide a point of contact for its British consumers. Tinyme is now expanding into the USA.