News Release

FOR WIRE TRANSMISSION: 10:00 A.M. EDT, WEDNESDAY JUNE 5, 2002
BEA 02-16

U.S. Business Enterprises Acquired or Established by Foreign Direct Investors: 2001




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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 
Outlays for New Investment in the United
States by Foreign Direct Investors, 1980-2001
Chart showing Outlays for New Investment in the United  States by Foreign Direct Investors, 1980-2001

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