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News Release: Foreign Direct Investors' Outlays to Acquire or Establish U.S. Businesses Rose Modestly in 2003

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


Thomas Anderson:	(202) 606-9879					BEA 04-24
Foreign Direct Investors' Outlays to Acquire or Establish U.S. Businesses Rose Modestly in 2003 In 2003, outlays by foreign direct investors to acquire or establish U.S. businesses rose modestly. Outlays were $60.3 billion, up 11 percent from 2002, when outlays were $54.5
Outlays for New Investment in the United    
States by Foreign Direct Investors, 1980-2003
Billion $ 

p Preliminary

This news release is available on BEA's website at:

billion.  Outlays remained far below those in 1998-2001, when new investment outlays ranged 
from $147.1 billion to $335.6 billion.  As in other recent years, large investments of more than 
$5 billion accounted for a sizable share of total outlays.

The persistence of reduced levels of outlays partly reflects weak conditions in some 
industries, such as manufacturing and telecommunications, in which foreign direct investors 
were active in recent years.  It also reflects a sharp slowdown in worldwide merger and 
acquisition activity in recent years.

Outlays in 2003 were boosted by a substantial increase in outlays in financial industries, 
as foreign banks sought to gain access to the large U.S. banking and consumer credit markets.  
Outlays in manufacturing and information, which accounted for a large share of the new 
investment in 1998-2001, declined substantially.  

Outlays from the United Kingdom and Germany increased, while outlays from France 
and several other European countries fell substantially.  Outlays from Japan declined for the third 
consecutive year.  There was a large increase in outlays from Australia.

Outlays in 2003

	As in previous years, outlays to acquire existing U.S. businesses--$52.6 billion--
accounted for most of the total outlays. Outlays to establish new businesses were $7.7 billion.

	By industry, outlays were largest in finance (except depository institutions) and insurance 
($21.6 billion).  Outlays in depository institutions, at $5.4 billion, were also relatively large,  
rebounding from outlays of $0.6 billion in 2002.  Outlays in information were $10.0 billion, 
which consisted mostly of investments in broadcasting, and were down from $14.2 billion in 
2002.  Outlays in manufacturing continued to decline, falling from $16.4 billion in 2002 to $9.5 
billion in 2003.  Within manufacturing, outlays were largest in food ($2.7 billion) and in 
computers and electronic products ($2.3 billion). Outlays in real estate fell to $2.6 billion in 
2003, down from $5.3 billion in 2002.

	By country of ultimate beneficial owner, outlays from the United Kingdom, which 
increased from $12.2 billion in 2002 to $22.5 billion in 2003, were the largest.  Outlays from 
Germany ($9.0 billion) were also higher than in 2002, but outlays from several other European 
countries, such as France ($1.1 billion), the Netherlands ($0.7 billion) and Switzerland ($0.5 
billion), were far lower than in 2002.  Outlays from Japan declined for the third consecutive year, 
to $1.5 billion. Outlays from Australia rose considerably, to $11.3 billion.  Outlays from Canada 
rose to $6.9 billion in 2003 from $4.3 billion in 2002.

      	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 2003 are preliminary. The estimate of total outlays for 2002 
has been revised up 4 percent from the preliminary estimate published last year.

Employment of newly acquired or established businesses

	Newly acquired or established businesses employed 160,900 people in 2003, down from 
218,500 in 2002.  Finance (except depository institutions) and insurance, with 34,000 employees, 
accounted for the largest share of employment in 2003.  Manufacturing also accounted for a 
large share of employment, with 33,100 employees.

					*     *     *

     	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 2003 will appear in the 
June issue of the Survey of Current Business, the monthly journal of the Bureau of Economic 

					*     *     *

     	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:

     	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 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:; phone: 202-512-1800; fax: 202-512-2250; mail: Stop SSOP, Washington, DC 20402-0001.
Table 1. Investment Outlays by Type of Investment, 1992-2003  
[Millions of dollars]    
    By type of investment          
Year Total U.S. businesses acquired U.S. businesses established        
1992 15,333 10,616 4,718        
1993 26,229 21,761 4,468        
1994 45,626 38,753 6,873        
1995 57,195 47,179 10,016        
1996 79,929 68,733 11,196        
1997 69,708 60,733 8,974        
1998 215,256 182,357 32,899        
1999 274,956 265,127 9,829        
2000 335,629 322,703 12,926        
2001 147,109 138,091 9,017        
2002 r 54,519 43,442 11,077        
2003 p 60,320 52,580 7,741        
 p   Preliminary.            
 r   Revised.              
Source: U.S. Bureau of Economic Analysis          


Table 2. Distribution of Investment Outlays by Size, 1992-2003
 19921993199419951996199719981999200020012002 r2003 p
Total outlays100100100100100100100100100100100100
  $5 billion or more000(D)0055554830(D)(D)
  $2 billion - $4.999 billion0(D)271829121116202218(D)
  $100 million - $1.999 billion425151485567272427404538
  Less than $100 million58(D)22(D)16217559(D)8
  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, 2000-2003
[Millions of dollars]
 200020012002 r2003 p
All industries335,629147,10954,51960,320
Food            (D)            (D)            (D)2,699
Beverages and tobacco products3,722582            (D)            (D)
Petroleum and coal products            (D)            (D)            (D)235
Plastics and rubber products3,154622891519
Nonmetallic mineral products6,3244251,228364
Primary metals379692514            (D)
Fabricated metal products63875894            (D)
Machinery1,213            (D)58683
Computers and electronic products42,60010,0525902,328
Electrical equipment, appliances, and components8,084            (D)948155
Transportation equipment3,230470750146
Wholesale trade8,5613,982871623
Retail trade1,6721,913551964
Publishing industries10,1359,545            (D)1,488
Motion pictures and sound recording industries            (D)1,179            (D)121
Broadcasting and telecommunications            (D)15,5292,1967,593
Information services and data processing services12,2281,345            (D)813
Depository institutions2,6365,7096135,416
Finance (except depository institutions) and insurance44,42040,7804,34421,622
Real estate and rental and leasing4,5263,5725,2662,607
Professional, scientific, and technical services32,3327,0444,0121,397
Other industries30,26418,9178,2348,139
  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, 2000-2003
[Millions of dollars]
 200020012002 r2003 p
All countries335,629147,10954,51960,320
United Kingdom110,20817,09512,18822,492
Other Europe23,88311,3813,0615,169
Latin America and Other Western Hemisphere15,40015,2743,487644
South and Central America5,334431373172
Other Western Hemisphere10,06614,8433,114472
Africa            (D)            (D)            (D)            (D)
Middle East947            (D)            (D)198
Asia and Pacific40,28211,3835,13113,518
Australia            (D)4,8691,56511,313
Other Asia and Pacific(D)1,169291718
United States 1            (D)            (D)804            (D)
  D Suppressed to avoid disclosure of data of individual companies.   
   p Preliminary.    
   r Revised.    
   NOTE. 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.
   1. 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. Business Enterprises Acquired or Established,
by Industry of U.S. Business Enterprise, 2002-2003
 2002 r2003 p
Millions of dollarsThousands of employeesHectares of land 1Millions of dollarsThousands of employeesHectares of land 1
Total assetsSalesNet incomeTotal assetsSalesNet income
All industries105,51655,6801,675218.5106,567232,64354,1141,709160.945,016
Wholesale trade1,2402,284(D)3.7587212,86393.4(D)
Retail trade6461,276(D)10.71191,5586,516(D)27.5(D)
Depository institutions4,503265330.9(D)48,6413,130(D)12.3223
Finance (except depository institutions) and insurance12,3691,606855.2(D)122,42612,102(D)34.038
Real estate and rental and leasing12,3662,7232622.36,6493,309461341.14,327
Professional, scientific, and technical services1,274847-594.5(D)1,525876-1623.930
Other industries33,22518,12673792.387,64020,1067,34826831.038,211
   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, acres of land owned in 2002 were 263,327, and in 2003 were 111,235.     
   NOTE. For newly acquired businesses, the data cover the most recent financial reporting year preceding acquistion.  For newly established businesses, the data are projections for the first full year of operations.
Source: U.S. Bureau of Economic Analysis