The United States received a whopping $ 348 billion in foreign direct investment in 2015, more than the double it received the previous year, latest US figures said today.
“FDI inflows in 2015 alone totaled a record $ 348 billion, rebounding from 2014 ($ 172 billion), and well above 2013 inflows ($ 201 billion),” said the report issued by the Office of Chief Economist, US Department of Commerce.
The report said that in 2014, the FDI position, or the stock of foreign investment, in the United States was $ 2.9 trillion on a historical-cost basis.
Manufacturing (36 per cent) and banking, finance, and insurance (20 per cent) comprised the majority of the stock of FDI, followed by “other industries” (18 per cent), and wholesale trade (12 per cent).
It said greenfield FDI in the US comes mostly from other developed economies, though China and India were responsible for relatively large amounts of greenfield investment in 2014. The largest source of greenfield FDI in 2014 was Canada at USD 4.0 billion.
In 2014, expenditures from Japan were $ 2.8 billion and those from China were $ 1.3 billion. The combined greenfield FDI from Europe was $ 4.7 billion in 2014.
Observing that investment in the United States remains strong, total FDI stock in the United States grew an average of 6 per cent per year from 2009-2014, the report said the largest sources of FDI into the United States are advanced economies, led by the United Kingdom, Japan, and Germany.
Majority-owned US 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 per cent of the US total expenditure on R&D by businesses.
According to the report, majority-owned US affiliates of foreign entities employed 6.1 million US workers in 2013, up from 5.8 million in 2011. These firms generally provide compensation at higher levels than the US average, at nearly USD 80,000 per US employee in 2013, as compared to average earnings of USD 60,000 for workers in the economy as a whole.
The US manufacturing sector continues to benefit greatly from inbound FDI flows, as nearly 70 per cent of FDI flows in 2015, and more than one-third of jobs at US majority-owned affiliates of foreign entities in 2013 were in manufacturing.
Newly collected data shows that “greenfield” investment expenditures by foreigners totaled USD 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 US companies; therefore, total first-year expenditures by foreign entities (acquisitions plus expansions plus establishment of new businesses) were $ 241.3 billion,” the report said.