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Ned Howenstine: (202) 606-9845 BEA 02-16
Foreign Direct Investors' Spending to Acquire or Establish U.S.
Businesses Fell Sharply in 2001 from a High Level
Spending by foreign direct investors to acquire or establish businesses in the United
States decreased 60 percent in 2001, from an exceptionally high level of $335.6 billion in 2000
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Outlays for New Investment in the United
States by Foreign Direct Investors, 1980-2001
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to $132.9 billion in 2001. The decrease reflected weakness in the U.S. and world economies and
a sharp drop in overall merger and acquisition activity worldwide. Despite the decrease, outlays
were still higher than in any year prior to 1998. The sharp decrease in outlays followed three
years of unprecedented spending for new investments.
Outlays fell sharply in telecommunications and other high-tech industries, where U.S.
business conditions were particularly weak. However, outlays remained strong in "finance
(except depository institutions) and insurance," particularly in insurance, as foreign investors
continue to be attracted by the large and expanding U.S. life insurance market. Outlays by British
investors plunged to $16.6 billion from $110.2 billion in 2000 and were substantially lower than
in the three previous years, when they were boosted by a few especially large investments in
high-tech industries and petroleum.
This news release is available on BEA's web site at <www.bea.gov/newsreleases/rels.htm>
Outlays in 2001
By industry, outlays were largest in finance (except depository institutions) and insurance
($37.9 billion) and manufacturing ($35.6 billion). Within manufacturing, outlays were largest in
food ($11.0 billion) and in computers and electronic products ($10.2 billion). Outlays were also
substantial in information ($26.0 billion), mainly in broadcasting and telecommunications and in
publishing.
By country of ultimate beneficial owner (UBO), the largest outlays were by Canadian
investors ($16.9 billion), followed by British investors ($16.6 billion). Among other European
countries, outlays by investors from Switzerland were $15.0 billion, and outlays by investors
from the Netherlands were $13.2 billion. In the Asian and Pacific area, Australia, the only major
source country to increase its spending from 2000, was the largest investor, at $5.0 billion.
Outlays by Japanese investors totaled $3.8 billion, down sharply from $26.0 billion in 2000,
when one large transaction accounted for most of the total.
The UBO is that person proceeding up a U.S. affiliates' ownership chain, beginning with
and including the foreign parent, that is not owned more than 50 percent by another person.
The estimate of total outlays for 2000 has been revised up 5 percent from the preliminary
estimate published last year.
Employment of newly acquired or established businesses
Newly acquired or established businesses employed 341,000 people in 2001.
Manufacturing, with 81,000 employees, accounted for the largest share of employment.
Employment was also substantial in professional, scientific, and technical services and in
information.
* * *
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 2001 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.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
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,
1992-2001
------------------------------------
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
1999 274,956
2000 r 335,629
2001 p 132,943
------------------------------------
p Preliminary.
r Revised
Source: U.S. Bureau of Economic
Analysis
Table 2.--Distribution of Investment Outlays by Size, 1992-2001
[Percent]
-----------------------------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000r 2001p
------------------------------------------------------------------------------------------------------------------------
Total outlays.......................... 100 100 100 100 100 100 100 100 100 100
$5 billion or more .................. 0 0 0 (D) 0 0 55 55 48 30
$2 billion - $4.999 billion ......... 0 (D) 27 18 29 12 11 16 20 22
$100 million - $1.999 billion ....... 42 51 51 48 55 67 27 24 27 40
Less than $100 million .............. 58 (D) 22 (D) 16 21 7 5 5 9
------------------------------------------------------------------------------------------------------------------------
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, 1998-2001
[Millions of dollars]
-----------------------------------------------------------------------------------------------------------
1998 1999 2000r 2001p
-----------------------------------------------------------------------------------------------------------
All industries ................................................... 215,256 274,956 335,629 132,943
Manufacturing .................................................. 149,243 73,122 143,285 35,579
Food ......................................................... 1,286 859 (D) 10,960
Beverages and tobacco products................................ 442 1,417 3,722 592
Petroleum and coal products................................... 67,658 158 (D) 0
Chemicals ................................................... 3,627 5,703 15,016 3,257
Plastics and rubber products.................................. 1,434 3,682 3,154 861
Nonmetallic mineral products.................................. 900 3,175 6,324 355
Primary metals................................................ 2,454 2,542 379 186
Fabricated metal products..................................... 532 1,388 638 615
Machinery .................................................... 5,220 13,941 1,213 1,439
Computers and electronic products ............................ 17,861 30,601 42,600 10,191
Electrical equipment, appliances, and components ............. 136 4,247 8,084 2,205
Transportation equipment ..................................... 37,177 2,786 3,230 146
Other ........................................................ 10,516 2,667 6,529 4,772
Wholesale trade ................................................ 3,321 (D) 8,561 3,214
Retail trade ................................................... 1,153 3,458 1,672 1,289
Information .................................................... 13,399 90,855 67,932 25,960
Publishing industries ........................................ 9,856 (D) 10,135 10,327
Motion pictures and sound recording industries ............... 36 (D) (D) 428
Broadcasting and telecommunications .......................... 2,841 78,202 (D) 14,187
Information services and data processing services ............ 667 (D) 12,228 1,018
Depository institutions ........................................ 1,563 (D) 2,636 6,161
Finance (except depository institutions) and insurance ......... 21,057 46,380 44,420 37,886
Real estate and rental and leasing ............................. 6,299 5,206 4,526 4,309
Professional, scientific, and technical services ............... 4,289 9,366 32,332 6,493
Other industries ............................................... 14,932 32,680 30,264 12,052
-----------------------------------------------------------------------------------------------------------
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 1999 2000r 2001p
-----------------------------------------------------------------------------------------------
All countries ......................................... 215,256 274,956 335,629 132,943
Canada .............................................. 22,635 9,271 28,346 16,928
Europe .............................................. 170,173 196,288 249,167 72,134
France ............................................ 14,493 23,750 26,149 4,995
Germany ........................................... 39,873 21,514 18,452 12,845
Netherlands ....................................... 19,009 22,265 47,686 13,238
Switzerland ....................................... 4,525 7,512 22,789 15,037
United Kingdom .................................... 84,995 109,226 110,208 16,557
Other Europe ...................................... 7,278 12,021 23,883 9,462
Latin America and Other Western Hemisphere .......... 11,354 33,046 15,400 (D)
South and Central America ......................... 920 1,622 5,334 (D)
Other Western Hemisphere .......................... 10,433 31,424 10,066 8,623
Africa .............................................. 212 (D) (D) (D)
Middle East ......................................... 2,810 848 947 (D)
Asia and Pacific .................................... 7,329 15,100 40,282 9,477
Australia ......................................... (D) (D) (D) 5,035
Japan ............................................. 4,862 11,696 26,044 3,797
Other Asia and Pacific ............................ (D) (D) (D) 645
United States /2/ ................................... 743 (D) (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, 2000-2001
-------------------------------------------------------------------------------------------------------------------------------------------------------------
2000r 2001p
----------------------------------------------- ----------------------------------------------
Millions of dollars Thousands Number Millions of dollars Thousands Number
---------------------------- of of ------------------------- of of
Total Sales Net emloyees hectares Total Sales Net employees hectares
assets Income of land assets Income of land
owned/1/ owned/1/
-------------------------------------------------------------------------------------------------------------------------------------------------------------
All industries......................................... 482,021 160,729 6,281 770.0 315,459 338,850 96,686 1,129 341.4 101,979
Manufacturing................................................ 147,355 60,254 3,713 194.5 200,740 38,934 28,654 532 81.0 19,724
Wholesale trade.............................................. 8,299 14,476 371 31.1 1,357 4,851 12,700 122 30.9 395
Retail trade................................................. 11,099 15,054 -353 104.6 (D) 1,465 3,364 8 26.2 202
Information.................................................. 48,306 13,752 -1,108 52.9 1,344 32,748 6,409 -712 38.6 144
Depository institutions...................................... 11,894 (D) (D) G (D) 69,338 4,406 309 8.8 109
Finance (except depository institutions) and insurance....... 179,555 19,610 2,413 41.3 152 160,768 21,996 1,746 32.7 (D)
Real estate and rental and leasing........................... 7,116 (D) (D) G 10,099 4,555 408 52 0.1 50,671
Professional, scientific, and technical services............. 29,364 10,242 467 72.3 442 14,340 10,068 -453 54.4 (D)
Other industries............................................. 39,034 25,380 502 268.6 100,996 11,851 8,680 -475 68.7 29,881
-------------------------------------------------------------------------------------------------------------------------------------------------------------
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 2000 and 2001 were 779,499 and 251,990,
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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