News Release

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, TUESDAY JUNE 1, 2004
BEA 04-24

Foreign Investors' Spending to Acquire or Establish U.S. Businesses, 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: www.bea.gov/newsreleases/rels.htm

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 
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 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: bookstore.gpo.gov; 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
[Percent]
                         
  1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 r 2003 p
Total outlays 100 100 100 100 100 100 100 100 100 100 100 100
  $5 billion or more 0 0 0 (D) 0 0 55 55 48 30 (D) (D)
  $2 billion - $4.999 billion 0 (D) 27 18 29 12 11 16 20 22 18 (D)
  $100 million - $1.999 billion 42 51 51 48 55 67 27 24 27 40 45 38
  Less than $100 million 58 (D) 22 (D) 16 21 7 5 5 9 (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]
         
  2000 2001 2002 r 2003 p
All industries 335,629 147,109 54,519 60,320
         
Manufacturing 143,285 37,592 16,446 9,538
Food             (D)             (D)             (D) 2,699
Beverages and tobacco products 3,722 582             (D)             (D)
Petroleum and coal products             (D)             (D)             (D) 235
Chemicals 15,016 4,636 1,232 1,213
Plastics and rubber products 3,154 622 891 519
Nonmetallic mineral products 6,324 425 1,228 364
Primary metals 379 692 514             (D)
Fabricated metal products 638 758 94             (D)
Machinery 1,213             (D) 586 83
Computers and electronic products 42,600 10,052 590 2,328
Electrical equipment, appliances, and components 8,084             (D) 948 155
Transportation equipment 3,230 470 750 146
Other 6,529 5,214 2,170 1,559
Wholesale trade 8,561 3,982 871 623
Retail trade 1,672 1,913 551 964
Information 67,932 27,599 14,181 10,015
Publishing industries 10,135 9,545             (D) 1,488
Motion pictures and sound recording industries             (D) 1,179             (D) 121
Broadcasting and telecommunications             (D) 15,529 2,196 7,593
Information services and data processing services 12,228 1,345             (D) 813
Depository institutions 2,636 5,709 613 5,416
Finance (except depository institutions) and insurance 44,420 40,780 4,344 21,622
Real estate and rental and leasing 4,526 3,572 5,266 2,607
Professional, scientific, and technical services 32,332 7,044 4,012 1,397
Other industries 30,264 18,917 8,234 8,139
         
  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]
         
  2000 2001 2002 r 2003 p
All countries 335,629 147,109 54,519 60,320
         
Canada 28,346 16,646 4,333 6,858
Europe 249,167 78,328 39,644 39,076
France 26,149 5,772 15,196 1,135
Germany 18,452 12,733 3,067 9,034
Netherlands 47,686 14,879 3,476 712
Switzerland 22,789 16,468 2,656 534
United Kingdom 110,208 17,095 12,188 22,492
Other Europe 23,883 11,381 3,061 5,169
Latin America and Other Western Hemisphere 15,400 15,274 3,487 644
South and Central America 5,334 431 373 172
Other Western Hemisphere 10,066 14,843 3,114 472
Africa             (D)             (D)             (D)             (D)
Middle East 947             (D)             (D) 198
Asia and Pacific 40,282 11,383 5,131 13,518
Australia             (D) 4,869 1,565 11,313
Japan 26,044 5,345 3,275 1,487
Other Asia and Pacific (D) 1,169 291 718
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 r 2003 p
Millions of dollars Thousands of employees Hectares of land 1 Millions of dollars Thousands of employees Hectares of land 1
Total assets Sales Net income Total assets Sales Net income
All industries 105,516 55,680 1,675 218.5 106,567 232,643 54,114 1,709 160.9 45,016
                     
Manufacturing 24,237 21,809 213 73.4 10,886 11,402 8,801 58 33.1 1,145
Wholesale trade 1,240 2,284 (D) 3.7 58 721 2,863 9 3.4 (D)
Retail trade 646 1,276 (D) 10.7 119 1,558 6,516 (D) 27.5 (D)
Information 15,656 6,746 319 25.5 1,127 22,954 12,015 -773 14.6 518
Depository institutions 4,503 265 33 0.9 (D) 48,641 3,130 (D) 12.3 223
Finance (except depository institutions) and insurance 12,369 1,606 85 5.2 (D) 122,426 12,102 (D) 34.0 38
Real estate and rental and leasing 12,366 2,723 262 2.3 6,649 3,309 461 34 1.1 4,327
Professional, scientific, and technical services 1,274 847 -59 4.5 (D) 1,525 876 -162 3.9 30
Other industries 33,225 18,126 737 92.3 87,640 20,106 7,348 268 31.0 38,211
                     
   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