WASHINGTON - The U.S. Department of Commerce Monday released a new report that highlights the impact of foreign direct investment (FDI) on the U.S. economy. The Foreign Direct Investment in the United States: Update to 2013 Report examines recent trends in FDI and highlights newly released “greenfield” FDI data from the Department’s Bureau of Economic Analysis (BEA). The report notes that foreign direct investment trends identified in earlier reports have continued to 2015.
“This report reaffirms that America is the world's best investment destination,” said Secretary Pritzker. “Foreign direct investment in the United States reached a record $348 billion in 2015, contributing to our economic growth and demonstrating our continued global competitiveness. At the Department of Commerce, we work every day to strengthen America’s best assets such as our highly productive workforce and our commitment to innovation to ensure that the United States remains the most attractive destination for investment.”
This report details trends in FDI from BEA data. BEA collects three broad sets of data on foreign direct investment in the U.S.: (1) international transactions (balance of payments) and direct investment position data, (2) financial and operating data of U.S. affiliates of foreign entities, including “majority” and “minority” owned U.S. affiliates, and (3) new foreign direct investment.
The report’s findings include:
- The U.S. is the largest recipient of global FDI, its inward FDI stock of $2.9 trillion on a historical-cost basis in 2014. On a current-cost basis, the U.S.’ FDI stock was more than three times larger than that of the next largest destination country in 2014.
- Investment in the U.S. remains strong, total FDI stock in the U.S. grew an average of 6 percent per year from 2009-2014.
- FDI Inflows in 2015 alone totaled a record $348 billion, rebounding from 2014 ($172 billion), and well above 2013 inflows ($201 billion).
- The largest sources of FDI into the U.S. are advanced economies, led by the United Kingdom, Japan, and Germany.
- Majority-owned U.S. affiliates of foreign entities produced $360 billion in goods exports in 2013. These firms are a catalyst for research and development in America, investing $53 billion in R&D and accounting for a record high 16.4 percent of the U.S. total expenditure on R&D by businesses.
- Majority-owned U.S. affiliates of foreign entities employed 6.1 million U.S. workers in 2013, up from 5.8 million in 2011. These firms generally provide compensation at higher levels than the U.S. average, at nearly $80,000 per U.S. employee in 2013, as compared to average earnings of $60,000 for workers in the economy as a whole.
- The U.S manufacturing sector continues to benefit greatly from inbound FDI flows, as nearly 70 percent of FDI flows in 2015, and more than one-third of jobs at U.S. majority-owned affiliates of foreign entities in 2013 were in manufacturing.
- Newly collected data shows that “greenfield” investment expenditures by foreigners totaled $16.6 billion in 2014, with expenditures on establishing new businesses totaling $13.8 billion and expenditures on expanding existing businesses totaling $2.8 billion.
- In 2014, foreign investors spent $224.7 billion acquiring U.S. companies; therefore, total first-year expenditures by foreign entities (acquisitions plus expansions plus establishment of new businesses) were $241.3 billion.