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Ned Howenstine (202) 606-9845 BEA 01-16
Foreign Direct Investors' Spending to Acquire or Establish
U.S. Businesses Increased to $321 Billion in 2000
Foreign direct investors' spending to acquire or establish
U.S. businesses increased 17 percent to $320.9 billion in 2000,
according to preliminary estimates by the U.S. Bureau of Economic
Analysis. Spending increased 28 percent to $275.0 billion in
1999 after more than tripling in 1998.
The unprecedented levels of new investment spending in the
last 3 years have coincided with soaring worldwide merger and
acquisition activity and with strong growth of the U.S. economy,
particularly when compared with that of many of the other major
industrialized countries. In these three years, foreign direct
investors' spending was boosted by a number of especially large
acquisitions These new investments tended to be in industries
in which large companies predominate, industries such as
petroleum, motor vehicles, food manufacturing,
telecommunications, and financial services. In both the
telecommunications and financial services industries,
deregulation and rapid technological change during the latter
half of the 1990's increased incentives for business
consolidations.
Investors from Europe accounted for 75 percent of total
investment spending during 1998-2000; up from 64 percent in 1995-
97. Spending by British investors, which accounted for over a
third of total investment spending, was more than three times
larger than spending by Netherlands investors, who spent the
second largest amount.
Outlays in 2000
By industry, outlays in 2000 increased sharply in
manufacturing (to $144.9 billion from $73.1 billion in 1999) and
in professional, scientific, and technical services (to $32.0
billion from $9.4 billion). Within manufacturing, the largest
increases were in food, petroleum, and computers and electronic
products. Outlays decreased in information services, but at
$62.2 billion, they remained substantial. Within information,
outlays were largest in broadcasting and telecommunications and
in information and data processing services.
By country of ultimate beneficial owner (UBO), outlays by
investors from Canada, Europe, and Asia and Pacific increased.
In Europe, most of the increase was accounted for by investors
from the Netherlands, Switzerland, and "Other Europe,"
particularly Spain, Finland, and Belgium. Although spending by
British investors was almost the same as in 1999, at $107.7
billion, it was much larger than that by investors from any other
country. Spending by investors from the Netherlands, at $47.9
billion, ranked second. In Asia and Pacific, about three-fourths
of the increase in outlays was accounted for by investors from
Japan; investors from Singapore also contributed to the increase.
Employment of the newly acquired or established businesses
U.S. businesses that were newly acquired or established by
foreign investors in 2000 employed 646,000 people. The employees
were largely accounted for by businesses in manufacturing
(particularly computers and electronic products, food, and
petroleum), in "other industries" (particularly employment
services and investigation and security services), in
professional, scientific, and technical services (particularly
advertising and related services), and in retail trade.
The 1999 estimate of total outlays has been revised down 3
percent from the preliminary estimate published last year.
* * *
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 2000 will appear in the June issue of the Survey of
Current Business, the monthly journal of the Bureau of Economic
Analysis.
* * *
BEA's major national, international, regional, and industry
estimates; the Survey of Current Business; and BEA news releases
are available without charge on BEA's Web site:
<www.bea.doc.gov>
STAT-USA maintains an Internet site that contains BEA
estimates, the Survey of Current Business, and BEA news releases.
For information about STAT-USA, go to <www.stat-usa.gov>, or call
(202) 482-1986. Subscriptions for single-user unlimited access
to STAT-USA's Internet information are $75.00 for 3 months or
$175.00 for 1 year. 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 transactions
Most of BEA's estimates and analyses appear 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.--Investment Outlays, 1992-2000
-----------------------------------
Year Outlays
(millions)
of dollars)
-----------------------------------
1992 15,333
1993 26,229
1994 45,626
1995 57,195
1996 79,929
1997 69,708
1998 215,256
1999r 274,956
2000p 320,858
-----------------------------------
p Preliminary.
r Revised.
Source: U.S. Bureau of Economic Analysis
Table 2.--Distribution of Investment Outlays by Size, 1992-2000
[Percent]
-----------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999r 2000p
-----------------------------------------------------------------------------------------------
Total outlays........................... 100 100 100 100 100 100 100 100 100
$5 billion or more ..................... 0 0 0 (D) 0 0 55 55 48
$2 billion - $4.999 billion ............ 0 (D) 27 18 29 12 11 16 20
$100 million - $1.999 billion .......... 42 51 51 48 55 67 27 24 28
Less than $100 million ................. 58 (D) 22 (D) 16 21 7 5 4
-----------------------------------------------------------------------------------------------
D Suppressed to avoid disclosure of data of individual companies.
p Preliminary.
r Revised.
Source: U.S. Bureau of Economic Analysis
Table 3.--Investment Outlays by Industry of U.S. Business Enterprise, 1998-2000
[Millions of dollars]
-----------------------------------------------------------------------------------------------------
1998 1999r 2000p
-----------------------------------------------------------------------------------------------------
All industries ......................................................... 215,256 274,956 320,858
Manufacturing .......................................................... 149,243 73,122 144,871
Food ................................................................. 1,286 859 (D)
Beverages and tobacco products........................................ 442 1,417 4,121
Petroleum and coal products........................................... 67,658 158 (D)
Chemicals ........................................................... 3,627 5,703 14,060
Plastics and rubber products.......................................... 1,434 3,682 2,540
Nonmetallic mineral products.......................................... 900 3,175 6,539
Primary metals........................................................ 2,454 2,542 321
Fabricated metal products............................................. 532 1,388 467
Machinery ............................................................ 5,220 13,941 1,048
Computers and electronic products .................................... 17,861 30,601 43,945
Electrical equipment, appliances, and components ..................... 136 4,247 8,287
Transportation equipment ............................................. 37,177 2,786 2,700
Other ................................................................ 10,516 2,667 6,643
Wholesale trade ........................................................ 3,321 (D) 7,486
Retail trade ........................................................... 1,153 3,458 (D)
Information ............................................................ 13,399 90,855 62,198
Publishing industries ................................................ 9,856 (D) 9,387
Motion pictures and sound recording industries ....................... 36 (D) (D)
Broadcasting and telecommunications .................................. 2,841 0 (D)
Information services and data processing services .................... 667 (D) 12,502
Depository institutions ................................................ 1,563 (D) (D)
Finance (except depository institutions) and insurance ................. 21,057 46,380 44,117
Real estate and rental and leasing ..................................... 6,299 5,206 3,197
Professional, scientific, and technical services ....................... 4,289 9,366 31,999
Other industries ....................................................... 14,932 32,680 23,283
-----------------------------------------------------------------------------------------------------
D Suppressed to avoid disclosure of data of individual companies.
p Preliminary.
r Revised.
Source: U.S. Bureau of Economic Analysis
Table 4.--Investment Outlays by Country of Ultimate Beneficial Owner,
1998-2000 /1/
[Millions of dollars]
-------------------------------------------------------------------------------------------
1998 1999r 2000p
-------------------------------------------------------------------------------------------
All countries ......................................... 215,256 274,956 320,858
Canada ................................................ 22,635 9,271 27,536
Europe ................................................ 170,173 196,288 244,705
France .............................................. 14,493 23,750 26,508
Germany ............................................. 39,873 21,514 16,887
Netherlands ......................................... 19,009 22,265 47,909
Switzerland ......................................... 4,525 7,512 22,485
United Kingdom ...................................... 84,995 109,226 107,666
Other Europe ........................................ 7,278 12,021 23,250
Latin America and Other Western Hemisphere .......... 11,354 33,046 13,072
South and Central America ........................... 920 1,622 (D)
Other Western Hemisphere ............................ 10,433 31,424 (D)
Africa ................................................ 212 (D) (D)
Middle East ........................................... 2,810 848 (D)
Asia and Pacific ...................................... 7,329 15,100 33,278
Australia ........................................... (D) (D) (D)
Japan ............................................... 4,862 11,696 25,343
Other Asia and Pacific .............................. (D) (D) (D)
United States /2/ ..................................... 743 (D) (D)
-------------------------------------------------------------------------------------------
D Suppressed to avoid disclosure of data of individual companies.
p Preliminary.
r Revised.
1. For investments in which more than one investor participated, each investor and
each investor's outlays are classified by country of each ultimate beneficial owner.
2. The United States is shown as the country of ultimate beneficial owner for
businesses newly acquired or established by foreign investors that are, in turn,
ultimately owned by persons located in the United States.
Source: U.S. Bureau of Economic Analysis
Table 5.--Selected Operating Data of U.S. Businesses Acquired or Established, by Industry of U.S. Business Enterprise, 1999-2000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1999r 2000p
----------------------------------------------------- -----------------------------------------------------
Millions of dollars Thousands Number Millions of dollars Thousands Number
----------------------------- of of -------------------------- of of
Total Sales Net employees hectares Total Sales Net employees hectares
assets income of land assets income of land
owned/1/ owned/1/
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
All industries.................................................. 454,012 124,253 895 602.7 582,642 446,838 142,315 7,454 645.5 310,301
Manufacturing......................................................... 73,715 42,219 -912 210.4 92,156 143,857 57,515 3,724 173.2 207,939
Wholesale trade....................................................... 4,098 11,886 -229 45.2 1,089 6,163 12,579 239 27.2 570
Retail trade.......................................................... 5,807 10,099 -23 55.5 (D) 6,831 8,508 -62 69.5 (D)
Information........................................................... 40,257 12,276 221 47.2 50 41,235 13,063 -345 47.7 1,392
Depository institutions............................................... 111,205 (D) 20 J 235 11,506 (D) (D) G (D)
Finance (except depository institutions) and insurance................ 164,780 13,448 2,309 29.5 1,239 175,930 19,337 2,307 41.9 116
Real estate and rental and leasing.................................... 6,604 (D) 67 I 4,401 4,741 (D) (D) G 4,506
Professional, scientific, and technical services...................... 3,273 2,196 -194 15.4 (D) 30,351 9,738 628 70.8 (D)
Other industries...................................................... 44,272 20,310 -362 179.5 482,066 26,224 19,967 790 210.9 95,088
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
D Suppressed to avoid disclosure of data of individual companies.
p Preliminary.
r Revised.
1. One hectare equals 2.471 acres. Thus, for all industries, the number of acres of land owned in 1999 and 2000 were 1,439,708 and 766,754, respectively.
NOTES.--For newly acquired businesses, data cover the most recently completed financial reporting year. For newly established businesses, data are
projections for the first full year of operations. Size ranges are given in employment cells that are suppressed. The size ranges are: A--1 to 499; F--500
to 999; G--1,000 to 2,499; H--2,500 to 4,999; I--5,000 to 9,999; J--10,000 to 24,999; K--25,000 to 49,999; L--50,000 to 99,999; M--100,000 or more.
Source: U.S. Bureau of Economic Analysis
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