Content area
Full text
EXPENDITURES BY foreign direct investors to acquire, establish, or expand U.S. businesses totaled $373.4 billion in 2016, down $66.1 billion, or 15.0 percent, from $439.6 billion in 2015 (table A and chart 1). The 2016 decrease in new foreign direct investment in the United States reflected a decrease in global mergers and acquisition activity.1 Despite the decrease, expenditures in 2016 were large relative to expenditures in other recent years. They were above the annual average of $350.0 billion for 2014-2015 and were well above the annual average of $226.0 billion for 2006-2008.
In 2016, as in previous years, the vast majority of the expenditures were to acquire existing businesses. In 2016, expenditures for acquisitions were $365.7 billion, expenditures to establish new U.S. businesses were $5.6 billion, and expenditures to expand existing foreign-owned businesses were $2.2 billion. Planned total expenditures, which include both first-year (2016) expenditures and planned future expenditures, were $387.7 billion.
Expenditures by industry, by country, and by state
By industry, as in the previous 2 years, manufacturing, $129.4 billion, accounted for the largest share of total expenditures (table 1). Within manufacturing, expenditures were largest in chemicals. Outside of manufacturing, expenditures were largest in professional, scientific, and technical services; and in finance and insurance, especially in insurance carriers and other activities.
By country of ultimate beneficial owner, a small number of countries accounted for most of the investment, and several of the largest source countries in 2016 were among the largest source countries in 2015. The largest source of new direct investment in the United States in 2016 was Canada, $58.5 billion (table 2). There were also substantial expenditures from the United Kingdom, Ireland, and Switzerland.
By region, about half of the new investment in 2016 was from Europe, of which the majority was in manufacturing. Nearly one-quarter of the new investment was from the Asia and Pacific region. New investment from China was $27.6 billion, up $19.8 billion, from $7.8 billion in 2015, although it made up less than 10.0 percent of the new investment in 2016.
By state, the largest expenditures were for U.S. businesses in California, $64.7 billion (table 3). There were also were substantial expenditures in Illinois, New York, and Texas.
Expenditures for new investment were 2.3 percent of U.S....