Outlays for New Investment in the United States by Foreign Direct Investors, 1980-2004

Billion $ p Preliminary __________________________ This news release is available on BEA's website at: www.bea.gov/newsreleases/rels.htm historically high, ranging from $147.1 billion to $335.6 billion. Transactions of more than $5 billion continued to account for a sizable share of total outlays. In 2004, outlays in depository institutions (banking) increased sharply and outlays in other financial services industries continued to be large, as overseas banks and finance and insurance companies continued to seek access to the profitable and open U.S. financial market. Outlays in manufacturing rose substantially. Outlays in information declined for the fifth consecutive year. Outlays by Canadian investors increased substantially and accounted for more than 40 percent of total outlays. Outlays from European investors were up slightly, as increases in outlays from the United Kingdom, Switzerland, and France were offset by decreases in outlays from Germany and other European countries. Outlays from Australia decreased. Outlays from Japan declined for the fourth consecutive year. Outlays in 2004 In 2004, as in previous years, outlays by foreign direct investors to acquire existing U.S. businesses (at $72.5 billion) were far larger than outlays to establish new U.S. businesses (at $7.3 billion). By industry, outlays in finance (except depository institutions) and insurance ($24.9 billion) were largest for the second consecutive year. Outlays in depository institutions, at $14.1 billion, were also large, up sharply from outlays of $4.9 billion in 2003. Outlays in manufacturing rebounded to $17.2 billion in 2004 from $10.8 billion in 2003. Within manufacturing, the largest increases were in chemicals, beverages and tobacco products, and computers and electronic products. Outlays in real estate rose to $4.8 billion in 2004, up from $2.8 billion in 2003. Outlays in information continued to decline, from $9.2 billion in 2003 to $3.1 billion in 2004. By country of ultimate beneficial owner, outlays from Canada were largest, increasing from $9.2 billion in 2003 to $32.4 billion in 2004. Outlays from the United Kingdom increased from $20.4 billion to $24.2 billion. Outlays from French and Swiss investors increased, while those from German investors decreased. Outlays from Japanese investors continued to decline from an already low level to $1.0 billion in 2004, down from a peak of $26.0 billion in 2000. Outlays from Australia decreased from $9.0 billion to $2.9 billion. The ultimate beneficial owner is that person, proceeding up a U.S. affiliate's ownership chain, beginning with and including the foreign parent, that is not owned more than 50 percent by another person. The estimates of outlays for 2004 are preliminary. The estimate of outlays for 2003 has been revised up 5 percent from the preliminary estimate published last year. Employment and assets of newly acquired or established businesses Newly acquired or established businesses employed 193,000 people in 2004, up from 166,100 in 2003. Manufacturing, with 48,300 employees, accounted for the largest share of employment in 2004. The total assets of newly established or acquired businesses were $313.0 billion in 2004, up from $219.1 billion in 2003. * * * Estimates in this report are based upon a Bureau of Economic Analysis survey that covers (1) existing U.S. business enterprises in which foreign investors acquired, either directly or through their U.S. affiliates, at least a 10 percent ownership interest and (2) new U.S. business enterprises established by foreign investors or their U.S. affiliates, also using the 10 percent ownership interest threshold. Additional details on the new investments by foreign investors in 2004 will appear in the June issue of the Survey of Current Business, the monthly journal of the Bureau of Economic Analysis. * * * BEA's national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. 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 606-5303 Personal income and outlays 606-5362 U.S. international transaction