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More firms invest in Newcastle and Gateshead amid challenging market

Newcastle and Gateshead has continued to cultivate significant inward investment and business growth during financial year 2025/26, with 31 companies choosing to establish operations in the area and a further 12 businesses expanding their presence. 

The latest results show that investment activity remained broadly consistent with historical averages, generating 1,619 new jobs and safeguarding 611 existing roles. 

The figures include a mix of businesses investing in the region for the first time, alongside relocations from elsewhere in the region and wider UK. This reflects an ongoing trend of companies consolidating operations into the city centre, attracted by the talented workforce, high-quality workspace and growing innovation ecosystem. 

This performance comes against a backdrop of geopolitical factors impacting global markets, where businesses are taking longer to make investment decisions amid economic uncertainty, pursuing more cautious expansion strategies. 

The latest EY UK Attractiveness Survey ranked Newcastle sixth in areas outside of London for Foreign Direct Investment (FDI) in 2025, however Greater London was the only English region to see FDI growth in 2025. Against this backdrop of falling overall FDI across the UK, Newcastle has maintained a steady flow of FDI projects, underpinned by its strong talent pipeline, competitive operating environment and established sector strengths.

Major investments during the year included German-owned industrial services business KAEFER, which relocated its UK and Ireland headquarters to Newcastle's Quayside, bringing 200 jobs, and fintech scale-up Modern World Business Solutions (MWBS), which is creating 100 roles at Hoults Yard. Investment in skills and education was also strengthened through major commitments from Arden University, which has opened a new campus on Newcastle Helix to widen participation in higher education and LMA Newcastle, which is a new creative campus set to develop skills and pathways into employment across music, performance and screen-based industries.

Gateshead’s gaming cluster continued to grow with a new venture by Pneuma Games Group launching a development studio in the town. Last Arrow joins an engaged community of companies creating critically-acclaimed titles in North East England.

Building on this momentum Invest Newcastle, led by Newcastle City Council and Gateshead Council in collaboration with Experience North East England, will continue to strategically position Newcastle and Gateshead’s offer to potential investors, inspiring more businesses to grow, invest and experience the region. 

Invest Newcastle provides businesses with a coordinated concierge-style service, supporting investors from initial enquiry and location selection through to recruitment, growth and long-term expansion, ensuring the city presents a seamless and compelling proposition to companies looking to establish and scale operations. 

Cllr Owen Burbridge, Cabinet Member for Economy, Jobs and Skills at Newcastle City Council, said:

"While businesses around the world are becoming more cautious about expansion, Newcastle has delivered another year of strong and consistent performance, helping to create jobs, safeguard employment and generate significant economic value for the city. These results highlight Newcastle's strategic position as the commercial engine of the North East’s economy.

"We are increasingly seeing businesses recognise our strengths as a leading centre for innovation, technology, professional services and talent. Whether companies are entering the market for the first time or consolidating activity from elsewhere in the UK, they are choosing Newcastle because it offers the skills, connectivity and business environment they need to grow.

"Our ambition is clear: to position Newcastle at the heart of the UK's innovation economy and to attract the investment that will create jobs, drive productivity and support long-term prosperity for our residents."

Councillor Steve Campion, Cabinet Member for Economic Development at Gateshead Council, said:

"These investment figures highlight the value of the strong partnership between Gateshead and Newcastle, and also reflect the growing confidence businesses have in Gateshead as a destination in its own right. From our thriving digital and creative sector to our advanced manufacturing and engineering industries, Gateshead offers the talent, connectivity and business support that companies need to succeed."

"We're particularly pleased to see continued growth in our gaming and digital cluster, with businesses such as Pneuma Games Group choosing Gateshead for their development studio. Alongside major regeneration projects, high-quality commercial space and excellent transport links, this demonstrates how Gateshead is creating the right conditions for innovative businesses to start, invest and grow."

Looking ahead, Newcastle and Gateshead will continue to focus on sectors where it has established strengths and clustering, including data science and technology, space and national security, subsea engineering, renewable energy, professional services and creative and innovation-led industries, building on the networks, supply chains and talent base that make the city a natural location for investment and growth.

This was posted in Bdaily's Members' News section by Molly Lymn .