Investment

Report: U.S. largest recipient of foreign direct investment since 2006

u.s. department of commerceA recent report from the U.S. Department of Commerce and President Obama’s Council of Economic Advisers showed that the country has been the largest recipient of foreign direct investment since 2006.

Last year, net U.S. assets of foreign affiliates totaled $3.9 trillion. Since 2006, the U.S. has ranked as one of the top recipients of FDI, with inflows of $1.5 trillion. FDI inflows totaled $166 billion last year.

The manufacturing, pharmaceuticals and petroleum and coal sectors saw considerable FDI, though outside manufacturing, wholesale trade, mining, finance and insurance, banking and non-bank holding companies saw the most FDI.

Investment dollars flow into the U.S. primarily from a number of industrial countries. Since 2010, Australia, Canada, Japan, Korea and seven European countries have accounted for more than 80 percent of new FDI, though investment dollars also come from emerging economies like China and Brazil.

Value-added by majority-owned U.S. affiliates of foreign firms accounted for 4.7 percent of total U.S. private output in 2011, and such firms employed approximately four percent of the private sector. Approximately one-third of jobs at U.S. affiliates are in the manufacturing industry.

The U.S. affiliates account for 9.6 percent of U.S. private investment and 15.9 percent of private research and development spending.

During the recession and recovery, employment at U.S. affiliates was more stable than private-sector employment, causing U.S. affiliates’ share of U.S. manufacturing employment to rise from 14.8 percent in 2007 to 17.8 percent in 2011. Compensation at U.S. affiliates has been consistently higher than the national average in both manufacturing and non-manufacturing jobs.

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