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News Release: Summary Estimates for Multinational Companies: Employment, Sales, and Capital Expenditures for 2002

The tables in this release are available in an XLS spreadsheet and the entire release is available in PDF format.


FOR WIRE TRANSMISSION: 8:30 A.M. EST, FRIDAY, APRIL 16, 2004

Ralph Kozlow:   	(202) 606-9604	(analysis)			     BEA 04-16
Ray Mataloni: 	(202) 606-9867	(data)

Summary Estimates for Multinational Companies: Employment, Sales, and Capital Expenditures for 2002
U.S. multinational companies (MNCs) employed 30.6 million workers worldwide
in 2002, of which 22.4 million were employed in the United States by U.S. parent
companies and 8.2 million were employed abroad by majority-owned foreign affiliates.
The employment of U.S. parents accounted for about one-fifth of total U.S. employment
in private industries. Capital expenditures by U.S. MNCs totaled $467.3 billion; U.S.
parents accounted for $350.6 billion and majority-owned foreign affiliates accounted for
$116.7 billion. Sales by U.S. parent companies totaled $6,483.2 billion, and those by
majority-owned foreign affiliates totaled $2,656.8 billion. Majority-owned U.S. affiliates of foreign MNCs employed 5.4 million workers in
2002, accounting for 5 percent of total U.S. employment in private industries. Capital
expenditures by these affiliates totaled $115.1 billion and their sales totaled $2,052.7
billion. For both U.S. MNCs and the majority-owned U.S. affiliates of foreign MNCs,
employment decreased for the second consecutive year in 2002. Employment by U.S.
MNCs decreased 1.5 percent in 2002, following a 3.0-percent decrease in 2001. U.S.
parent companies more than accounted for the decreases in both years; their employment
decreased 2.2 percent in 2002, following a 4.1-percent decrease in 2001. Employment by
majority-owned foreign affiliates of U.S. MNCs increased 0.6 percent in 2002 and 0.1
percent in 2001. Employment by majority-owned U.S. affiliates of foreign MNCs
decreased 3.0 percent in 2002, following a 0.7-percent decrease in 2001. The decreases
for U.S. parents and U.S. affiliates mirrored decreases in total U.S. employment in
private industries, which decreased 1.3 percent in 2002 following a slight decrease in
2001. Sales and capital expenditures of U.S. MNCs and majority-owned U.S. affiliates
also decreased in 2002. Worldwide employment and capital expenditures of U.S. MNCs remained
concentrated in the United States in 2002: U.S. parents accounted for about three-
quarters, and majority-owned foreign affiliates for about one-quarter, of their combined
employment and capital expenditures. Although these shares remained high, they were
several percentage points below their 1988 values. The U.S.-parent share of MNC
activity can change for a number of reasons, and the changes do not uniformly
correspond to either additions to, or subtractions from, employment and capital
expenditures in the United States. Examples of factors that might be associated with a
change in the parent and affiliate shares of MNC activity include different rates of
economic growth in the United States and in specific markets where investment is
occurring abroad, the creation of new market opportunities abroad that cannot be served
by exports from the United States, and changes in the foreign-currency value of the U.S.
dollar. Additional discussion of data and analytical considerations may be found in an
article published in the March 2004 issue of the Survey of Current Business (see box
below). -------------------------------------------------------------------------------------------------------------- Accelerated Release of the MNC Estimates As part of ongoing efforts by the Bureau of Economic Analysis to improve the
timeliness of its estimates, this year, BEA has accelerated the release of summary
estimates for 2002 of employment, sales, and capital expenditures by U.S. parent
companies, by their foreign affiliates, and by U.S. affiliates of foreign MNCs. These
estimates complement or update estimates that appear in an article in the March 2004
issue of the Survey of Current Business, "A Note on Patterns of Production and
Employment by U.S. Multinational Companies." Estimates based on more complete
source data, including country and industry detail, will be released later this year. -------------------------------------------------------------------------------------------------------------- * * * TECHNICAL NOTE The estimates presented in this release were constructed from data collected by
BEA in two distinct surveys of MNC operations: (1) a survey of U.S. MNCs that covers
the operations of both U.S. parent companies and their foreign affiliates, and (2) a survey
of the operations of U.S. affiliates of foreign MNCs. Because a U.S. parent company
may itself be foreign-owned, there is some duplication between the data on U.S. parent
companies and on U.S. affiliates; thus, to avoid duplication, data on U.S. parents and U.S.
affiliates should not be added together to produce U.S. totals.
The estimates presented here pertain to nonbank U.S. parent companies and their majority-owned nonbank foreign affiliates, and to majority-owned nonbank U.S. affiliates of foreign MNCs. Data on all nonbank U.S. and foreign affiliates, including affiliates that are not majority-owned, will be presented in the Survey of Current Business later this year. The most recent data show that nonbank foreign affiliates that were not majority-owned employed 1.6 million workers, and nonbank U.S. affiliates that were not majority-owned employed 0.7 million workers, in 2001. Data on banks are collected only in benchmark years. The most recent data on U.S. parents and foreign affiliates in banking were presented in U.S. Direct Investment Abroad: Final Results from the 1999 Benchmark Survey. These data show that U.S. bank parents employed 1.0 million workers, and that bank and nonbank foreign affiliates of U.S. bank parents, plus bank affiliates of U.S. nonbank parents, together employed 0.2 million workers in 1999. The most recent data on U.S. affiliates in banking were presented in Foreign Direct Investment in the United States: Final Results from the 1997 Benchmark Survey. These data show that U.S. affiliates that were banks employed 0.1 million workers in 1997. Data from the 2002 benchmark survey of foreign direct investment in the United States are scheduled to be released later this year. In addition to presenting data collected directly in its surveys of MNC operations, BEA uses data collected on costs incurred and profits earned in production to estimate the gross product (or value added) of U.S. parent companies, of majority-owned foreign affiliates, and of U.S. affiliates of foreign companies. Gross product estimates indicate the contribution of parents or affiliates to gross domestic product in the United States or in foreign host countries. The latest estimates of the gross product of U.S. parent companies and majority-owned foreign affiliates, which cover the year 2001, are presented in "U.S. Multinational Companies: Operations in 2001," in the November 2003 issue of the Survey of Current Business. The latest estimates of the gross product of U.S. affiliates of foreign companies, which also cover 2001, are presented in "U.S. Affiliates of Foreign Companies: Operations in 2001," in the August 2003 issue of the Survey of Current Business. * * * BEA's major national, regional, international, and industry estimates, the Survey of Current Business, and BEA news releases are available on BEA's Web site: www.bea.gov Summary BEA estimates are available on recorded messages at the time of public release at the following telephone numbers: (202) 606-5306 Gross domestic product (202) 606-5303 Personal income and outlays (202) 606-5362 U.S. international transactions Most of BEA's estimates and analyses are published in the Survey of Current Business, BEA's monthly journal. Subscriptions and single copies of the printed Survey are for sale by the Superintendent of Documents, U.S. Government Printing Office. Internet: bookstore.gpo.gov; phone: (202) 512-1800; fax: (202) 512-2250; mail: Stop SSOP, Washington, DC 20402-0001. * * * Table 1. Employment, Capital Expenditures, and Sales by Nonbank U.S. Multinational Companies, 1988-2002 -------------------------------------------------------------------------------------------------------------- Thousands of employees Millions of dollars ------------------------------------ ---------------------------------------------------------------- U.S. U.S. Majority- Capital expenditures/1/ Sales/2/ multinational parents owned ------------------------------------ ---------------------- companies foreign U.S. U.S. Majority- U.S. Majority- affiliates multinational parents owned parents owned companies foreign foreign affiliates affiliates -------------------------------------------------------------------------------------------------------------- 1988 ...... 22,498.1 17,737.6 4,760.5 223,814 177,203 46,611 2,828,209 927,886 1989 ...... 23,879.4 18,765.4 5,114.0 260,488 201,808 58,680 3,136,837 1,019,966 1990 ...... 23,785.7 18,429.7 5,356.0 274,614 213,079 61,535 3,243,721 1,208,349 1991 ...... 23,345.4 17,958.9 5,386.5 269,221 206,290 62,931 3,252,534 1,242,635 1992 ...... 22,812.0 17,529.6 5,282.4 272,049 208,834 63,215 3,330,886 1,291,649 1993 ...... 22,760.2 17,536.9 5,223.3 271,661 207,437 64,224 3,480,778 1,275,775 1994 ...... 24,272.5 18,565.4 5,707.1 303,364 231,917 71,447 3,990,013 1,435,901 1995 ...... 24,499.7 18,576.2 5,923.5 323,616 248,017 75,599 4,235,578 1,693,836 1996 ...... 24,867.0 18,790.0 6,077.0 340,510 260,048 80,462 4,478,970 1,868,588 1997 ...... 26,358.0 19,878.0 6,480.0 398,037 309,247 88,790 4,886,330 1,972,515 1998 ...... 26,592.9 19,819.8 6,773.1 411,155 317,184 93,971 4,970,138 1,971,909 1999/3/ ... 30,772.6 23,006.8 7,765.8 483,032 369,728 113,304 5,975,478 2,218,945 2000 ...... 32,056.6 23,885.2 8,171.4 506,950 396,313 110,637 6,695,166 2,507,433 2001/4/ ... 31,087.9 22,907.0 8,180.9 533,325 422,303 111,022 6,786,610 2,614,080 2002/5/ ... 30,633.9 22,400.3 8,233.6 467,278 350,582 116,695 6,483,192 2,656,834 Percent change at annual rates: 1988-1999 ... 2.9 2.4 4.5 7.2 6.9 8.4 7.0 8.2 1999-2000 ... 4.2 3.8 5.2 5.0 7.2 -2.4 12.0 13.0 2000-2001 ... -3.0 -4.1 0.1 5.2 6.6 0.3 1.4 4.3 2001-2002 ... -1.5 -2.2 0.6 -12.4 -17.0 5.1 -4.5 1.6 -------------------------------------------------------------------------------------------------------------- 1. Total expenditures for property, plant, and equipment. 2. An MNC-wide total for sales is not provided because transactions among and within MNCs would be duplicated. 3. Break-in-series. (See the technical note on page 121 of the December 2002 issue of the Survey of Current Business for details.) 4. These estimates update those published in the November 2003 and March 2004 issues of the Survey of Current Business. Revised estimates based on more complete source data are scheduled to be released later this year. 5. Advance estimates. Preliminary estimates based on more complete source data are scheduled to be released later this year. NOTE: The data presented in this table cover nonbank U.S. MNCs only. Bank parents and affiliates, which report extensive data to other U.S. Government agencies, are not required to report in BEA's annual surveys of the operations of U.S. MNCs. Some limited data on the operations of bank parents and affiliates (including employment and sales) are reported in benchmark surveys of U.S. direct investment abroad conducted by BEA every five years. The latest benchmark survey results cover the year 1999. Table 2. U.S.-Parent Share of Selected Measures of the Operations of Nonbank U.S. Multinational Companies [Percent] ----------------------------------------- Employment Capital expenditures ----------------------------------------- 1988 ............ 78.8 79.2 1989 ............ 78.6 77.5 1990 ............ 77.5 77.6 1991 ............ 76.9 76.6 1992 ............ 76.8 76.8 1993 ............ 77.1 76.4 1994 ............ 76.5 76.4 1995 ............ 75.8 76.6 1996 ............ 75.6 76.4 1997 ............ 75.4 77.7 1998 ............ 74.5 77.1 1999 ............ 74.8 76.5 2000 ............ 74.5 78.2 2001/1/ ......... 73.7 79.2 2002/2/ ......... 73.1 75.0 ----------------------------------------- 1. These estimates update those published in the November 2003 and March 2004 issues of the Survey of Current Business. Revised estimates based on more complete source data are scheduled to be released later this year. 2. Advance estimates. Preliminary estimates based on more complete source data are scheduled to be released later this year. Table 3. Employment, Capital Expenditures, and Sales by Majority-Owned Nonbank U.S. Affiliates of Foreign Companies, 1988-2002 ------------------------------------------------------------------------- Thousands Millions of dollars of --------------------------------- employees Capital Sales Expenditures/1/ ------------------------------------------------------------------------- 1988 ....................... 3,119.0 42,355 739,128 1989 ....................... 3,573.4 51,490 863,538 1990 ....................... 3,841.7 61,812 995,013 1991 ....................... 3,991.3 60,097 1,008,388 1992 ....................... 3,903.9 52,787 1,049,942 1993 ....................... 3,851.7 53,371 1,112,693 1994 ....................... 3,954.0 60,317 1,210,837 1995 ....................... 4,022.6 64,778 1,311,210 1996 ....................... 4,155.6 77,890 1,423,715 1997 ....................... 4,269.1 88,313 1,478,221 1998 ....................... 4,669.5 109,365 1,622,946 1999 ....................... 5,064.3 114,767 1,792,520 2000 ....................... 5,656.5 112,986 2,051,878 2001/2/ .................... 5,618.0 121,762 2,071,240 2002/3/ .................... 5,449.0 115,127 2,052,662 Percent change at annual rates: 1988-1999 .................. 4.5 9.5 8.4 1999-2000 .................. 11.7 -1.6 14.5 2000-2001 .................. -0.7 7.8 0.9 2001-2002 .................. -3.0 -5.4 -0.9 ------------------------------------------------------------------------- 1. Total expenditures for property, plant, and equipment. 2. These estimates update those published in the August 2003 issue of the Survey of Current Business. Revised estimates based on more complete source data are scheduled to be released later this year. 3. Advance estimates. Preliminary estimates based on more complete source data are scheduled to be released later this year. NOTES: The data presented in this table cover nonbank affiliates only. Bank affiliates, which report extensive data to other U.S. Government agencies, are not required to report in BEA's annual surveys of the operations of U.S. affiliates of foreign companies. Some limited data on the operations of bank affiliates (including employment and sales) are reported in benchmark surveys of foreign direct investment in the United States conducted by BEA every five years. Selected data on bank affiliates from the 2002 benchmark survey are scheduled to be released later this year. In contrast to the presentation in Table 1 for U.S. multinational companies (which includes data for U.S. parent companies), this table does not include data on foreign parent companies or totals for foreign multinational companies, because they are not covered in BEA's surveys.

Chart of U.S. -Parent Share of Employment by Nonbank U.S. Multinational Companies, 1988-2002

Chart of U.S. -Parent Share of Capital Expenditures by Nonbank U.S. Multinational Companies, 1988-2002