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B U R EA U O F E C O N O M IC ANALYSIS NEW S RELEASE U .S . D U P A R T M E N T O F C O M M E R C E E M B A R G O E D U N T IL R E L E A S E A T 8:30A M ED T, T H U R SD A Y , JU N E 1, 2006 L aw rence M cN eil: (202) 606-9860 B E A 06-22 Foreign D irect Investors’ O utlays to A cquire or E stablish U.S. Businesses C hanged L ittle in 2005 In 2005, outlays by foreign direct investors to acquire or establish U .S. businesses w ere $86.8 billion, little ch anged from the $86.2 billion in outlays in 2004. O utlays rem ain ed considerably b elo w those in 1998-2001, w hen new investm ent outlays w ere h istorically high, ranging from $147.1 billion to $335.6 billion. O utlays for N ew Investm ent in the U nited States by F oreign D irect Investors, 1980-2005 B illio n $ r - R e v is e d T his new s release is available on B E A ’s w ebsite at w w w .bea. g o v /bea/rels.htm . -more- - 2 - O utlays in creased substantially in m anufacturing, inform ation, and depository institutions. T ogether, these three sectors accounted for 58 p ercen t o f total outlays. The increase in inform ation w as the first increase since 1999. O utlays in finance (except depository institutions) and insurance declined sharply, by $20.0 billion, or 76 percent. O utlays from E urope increased substantially, particularly those b y investors in the U nited K ingdom , G erm any, and the N etherlands. O utlays from the A sia and P acific and M iddle E ast regions also increased substantially. F o r the A sia and P acific region, the increase w as largely accounted for b y Japanese and A ustralian investm ents. These increases w ere p artly offset by a decline in investm ent outlays from C anada, w here outlays h ad risen sharply in 2004. O utlays in 2005 In 2005, as in previous years, outlays b y fo reig n direct investors to acquire existing U .S. businesses (at $79.2 billion) w ere significantly larger th an outlays to establish n ew U .S. businesses (at $7.6 billion). B y industry, outlays in m anufacturing increased to $31.3 b illio n from $18.3 billio n in 2004. T ransportation equipm ent, prim ary m etals, and chem icals had the largest increases w ithin m anufacturing. In vestm ent grow th in industries other th an m otor vehicles accounted for m o st o f the increase in tran sp o rtatio n equipm ent. O utlays in inform ation increased for the first tim e since 1999, to $9.6 b illio n from $4.3 billion in 2004. The telecom m unications and publish in g sub-sectors had the larg est increases w ithin inform ation. The m ajo r sector postin g the larg est decrease in outlays w as finance (except depository institutions) and insurance. B y country o f ultim ate beneficial ow ner, outlays by E uropean investors increased to $57.2 billio n from $43.8 b illio n in 2004. B ritish investm ent accounted for over h a lf o f E uropean outlays. Investm ent from the N eth erlan d s in creased substantially to $3.1 billion. A sia and Pacific reg io n outlays also rose in 2005, increasing to $10.7 billion from $6.0 b illio n in 2004. This increase reflected larger outlays from A u stralia as w ell as the first increase in outlays from Japan since 2000. C anadian outlays declined 58 percent to $13.3 billio n from $31.5 billio n in 2005. T he ultim ate beneficial ow ner is the investor, p ro ceeding up a U .S. a ffiliate’s ow nership chain, beginning w ith the foreign parent, th at is not ow ned m ore th an 50 percent b y another investor. The data on n ew investm ent outlays are classified by country based on the lo catio n o f the U B O ; thus, they are show n ag ain st the country o f the investor th at ultim ately ow ns or controls the affiliate, even th o u g h the investor m ay have channeled the funds for th e investm ent th o u g h another country, such as a financial center. The estim ates o f outlays for 2005 are prelim inary. The estim ate o f outlays for 2004 has been revised up 8 percent from the p relim in ary estim ate pu b lish ed last year. -more- -3E m plovm ent and assets o f new ly acquired or established businesses N ew ly acquired or established businesses em ployed 223,800 people in 2005, up 6 percent from 211,600 in 2004. M anufacturing accounted for the largest share o f em ploym ent, w ith 92,200 em ployees. The total assets o f new ly acquired or established businesses w ere $170.5 billion, dow n from $308.6 b illio n in 2004. * * * E stim ates in this report are based upon a B ureau o f E conom ic A nalysis survey th a t covers (1) existing U .S. business enterprises in w hich foreign investors acquired, either directly or th ro u g h their U .S. affiliates, at least a 10 percent ow nership interest and (2) new U .S. business enterprises established by foreign investors or th eir U .S. affiliates, also using the 10 percent ow nership interest threshold. A dditional details on the new investm ents by foreign investors in 2005 w ill appear in the June issue o f the S u r v e y o f C u r r e n t B u s i n e s s , the m onthly jo u rn al o f the B u reau o f E conom ic A nalysis. * * * B E A ’s national, international, regional, and industry estim ates; the S u r v e y o f and B EA new s releases are available w ithout charge on B E A ’s w ebsite at w w w .b ea.g o v . B y visiting the site, you can also subscribe to receive free e-m ail sum m aries o f B E A releases and announcem ents. C u r r e n t B u s in e s s ; Sum m ary B E A estim ates are available on recorded m essages at the tim e o f public release at the follow ing telephone num bers. (202) 606-5306 G ross dom estic product 606-5303 Personal incom e and outlays -m ore- Tab le 1. Investm ent O utlays by Type of Investm ent and Investor, 1992-2005 [Millions of do lars] 1992 T o tal o utlays 1993 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004r 2005 p 15,333 26,229 45,626 57,195 79,929 69,708 215,256 274,956 335,629 147,109 54,519 63,591 86,219 86,823 1 0 ,6 1 6 2 1 ,7 6 1 3 8 ,7 5 3 4 7 ,1 7 9 6 8 ,7 3 3 6 0 ,7 3 3 1 8 2 ,3 5 7 2 6 5 ,1 2 7 3 2 2 ,7 0 3 1 3 8 ,0 9 1 4 3 ,4 4 2 5 0 ,2 1 2 7 2 ,7 3 8 7 9 ,2 2 0 4 ,7 1 8 4 ,4 6 8 6 ,8 7 3 1 0 ,0 1 6 1 1 ,1 9 6 8 ,9 7 4 3 2 ,8 9 9 9 ,8 2 9 1 2 ,9 2 6 9 ,0 1 7 1 1 ,0 7 7 1 3 ,3 7 9 13,4 81 7 ,6 0 3 4 ,0 5 8 6 ,7 2 0 1 3 ,6 2 8 1 1 ,9 2 7 3 2 ,2 3 0 1 3 ,8 9 9 1 2 0 ,8 2 8 1 2 0 ,8 7 8 1 0 5 ,1 5 1 2 3 ,1 3 4 1 3 ,6 5 0 2 7 ,8 6 6 3 4 ,1 8 4 4 3 ,5 7 9 1 1 ,2 7 5 1 9 ,5 0 9 3 1 ,9 9 9 4 5 ,2 6 8 4 7 ,6 9 9 5 5 ,8 0 9 9 4 ,4 2 8 1 5 4 ,0 7 8 2 3 0 ,4 7 8 1 2 3 ,9 7 5 4 0 ,8 6 9 3 5 ,7 2 5 5 2 ,0 3 5 4 3 ,2 4 4 1995 B y typ e o f in vestm ent: U .S . b u s in e s s e s a c q u ire d U .S . b u s in e s s e s e s ta b lis h e d By ty p e o f investor: F o re ig n d ire c t in v e s to rs U .S . a ffilia te s p P re lim in a ry r R e v is e d S o u rc e : U .S . B u re a u o f E c o n o m ic A n a ly s is Table 2. Distribution of Investm ent O utlays by Size, 1992-2005 ____ _____ 1992 [Percent] _____ ________________ 1993 1994 100 100 100 100 100 100 100 100 100 100 100 $ 5 b illio n o r m o re 0 0 0 (D) 0 0 55 55 48 30 (D) $ 2 b illio n - $ 4 ,9 9 9 b illio n 0 (D) 27 18 29 12 11 16 20 22 48 55 67 27 24 27 40 16 21 7 5 5 9 T o ta l o u tlays $ 1 0 0 m illio n - $ 1 ,9 9 9 b illio n 42 51 51 L e s s th a n $ 1 0 0 m illio n 58 (D) 22 1995 __ (PL p P re lim in a ry r R e v is e d D S u p p re s s e d to a v o id d is c lo s u re o f d a ta o f in d iv id u a l c o m p a n ie s . S o u rc e : U .S . B u re a u o f E c o n o m ic A n a ly s is 1996 1997 1998 1999 2000 20 01 2002 2004r 2005 p 100 100 100 (D) 0 18 (D) (D) 13 27 45 43 47 65 __ (PL 2003 12 __ (PL 7 Tab le 3. In vestm en t O utlays by Industry o f U.S. Business Enterprise, 2003-2005 [Millions of dollars] 2003 A ll in d u stries M an u fa ctu rin g Food B e v e ra g e s a n d to b a c c o p ro d u c ts T e x tile s , a p p a re l, a n d le a th e r p ro d u c ts Paper P rin tin g a n d re la te d s u p p o rt a c tiv itie s P e tro le u m a n d c o a l p ro d u c ts C h e m ic a ls 2004 2005 p 63,591 86,219 86 ,823 10,750 18,251 31,286 2 ,5 1 6 2 ,1 4 6 736 (D) (D) (D) (D) (D) (D) (D) (D) 1 20 0 (D) (D) 219 0 116 1 ,1 6 4 4 ,7 5 1 6 ,0 6 7 P la s tic s a n d ru b b e r p ro d u c ts 498 84 1 ,1 5 7 N o n m e ta llic m in e ra l p ro d u c ts (D) 153 (D) P rim a ry m e ta ls 91 (D) (D) 5 ,5 4 6 F a b ric a te d m e ta l p ro d u c ts M a c h in e ry C o m p u te rs a n d e le c tro n ic p ro d u c ts 123 116 122 642 287 2 ,1 2 5 2 ,9 3 4 4 ,0 3 0 E le c tric a l e q u ip m e n t, a p p lia n c e s , a n d c o m p o n e n ts 139 (D) 861 T ra n s p o rta tio n e q u ip m e n t 225 1 ,1 9 9 7 ,0 8 6 462 O th e r 969 4 ,9 2 3 1,086 (D) 2,292 R etail tra d e 941 3,073 2,166 In fo rm atio n 9,236 4,3 1 5 9,639 1,431 1 ,2 7 4 2 ,8 2 2 278 (D) (D) 4 ,2 1 9 W h o le s a le tra d e P u b lis h in g in d u s trie s M o tio n p ic tu re a n d s o u n d re c o rd in g in d u s trie s T e le c o m m u n ic a tio n s O th e r D ep o sito ry in stitu tio n s F in an ce (e x c e p t d e p o s ito ry in s titu tio n s ) an d in su ran ce Real es ta te an d ren tal an d leasin g (D) (D) (D) 2 ,7 8 3 (D) 4,864 ( D) 9,609 23,511 2 6 ,2 3 4 6,196 2,817 6,335 5,532 P ro fess io n al, s c ie n tific , an d tec h n ic a l se rvice s 1,955 ( D) 6,879 O th e r in d u s trie s 8,429 10,121 13 ,224 p P re lim in a ry r R e v is e d D S u p p re s s e d to a v o id d is c lo s u re o f d a ta o f in d iv id u a l c o m p a n ie s . S o u rc e : U .S . B u re a u o f E c o n o m ic A n a ly s is Tab le 4. Investm ent O utlays by C ountry of Ultim ate Beneficial Owner, 2003-2005 [IV ¡ l i i o n s o f d o l l a r s l 2003 A ll co u n tries 2004 ’ 63,591 2005 86,219 p 86,823 C an ad a 9,157 31,502 13,269 E u rop e 39 ,024 43,815 57,244 F ra n c e 2 ,9 5 5 6 ,4 1 5 6 ,1 0 5 G e rm a n y 8 ,8 3 0 4 ,7 8 8 7 ,1 1 0 N e th e rla n d s 1 ,0 7 7 46 1 3 ,1 1 0 649 6 ,5 0 5 2 ,2 3 7 2 0 ,3 7 3 2 3 ,2 8 8 3 0 ,3 1 0 5 ,1 4 0 2 ,3 5 8 8 ,3 7 2 1,607 2,629 2,398 S o u th a n d C e n tra l A m e ric a 182 1 ,3 8 2 763 O th e r W e s te rn H e m is p h e re 1 ,4 2 5 1 ,2 4 7 1 ,6 3 4 ( D) ( D) 0 1,738 1,318 3,156 S w itz e rla n d U n ite d K in g d o m O th e r E u ro p e L atin A m erica and O th e r W e ste rn H em isp h e re A frica M id d le E ast A s ia and P acific 11,469 6,015 10,655 A u s tra lia 9 ,0 3 2 3 ,8 5 0 5 ,1 4 8 Japan 1 ,5 4 4 1 ,0 2 7 3 ,5 6 5 893 1 ,1 3 9 1 ,9 4 2 ( D) ( D) 101 O th e r A s ia a n d P a c ific U n ited S ta te s 1 p P re lim in a ry r R e v is e d D S u p p re s s e d to a v o id d is c lo s u re o f d a ta o f in d iv id u a l c o m p a n ie s . 1. T h e U n ite d S ta te s is th e c o u n try o f u ltim a te b e n e fic ia l o w n e r fo r b u s in e s s e s n e w ly a c q u ire d o r e s ta b lis h e d b y fo re ig n in v e s to rs th a t a re u ltim a te ly o w n e d b y p e rs o n s lo c a te d in th e U n ite d S ta te s . N o te : F o r in v e s tm e n ts in w h ic h m o re th a n o n e in v e s to r p a rtic ip a te d , e a c h in v e s to r a n d e a c h in v e s to r's o u tla y s a re c la s s ifie d b y th e c o u n try o f e a c h in d iv id u a l u ltim a te b e n e fic ia l o w n e r. S o u rc e : U .S . B u re a u o f E c o n o m ic A n a ly s is Table 5. Selected O perating Data o f U.S. Business Enterprises Acquired or Established, by Industry of U.S. Business Enterprise, 2004-2005 2004r M illio n s o f d o lla rs T o ta l a s s e ts A ll in d u stries S a le s 2005 p N et Thousands of H e c ta re s T o ta l in c o m e e m p lo y e e s o f la n d 1 a s s e ts S a le s 169,963 170,462 65 ,934 2,757 223.8 35,721 Thousands M il io n s o f d o lla rs Net of H e c ta re s in c o m e e m p lo y e e s o f la n d 1 308,638 67,336 3,644 211.6 3 3 ,0 0 8 2 2 ,0 8 9 954 6 1 .5 (D) 37,9 11 4 0 ,3 0 8 1 ,8 1 9 9 2 .2 1 5 ,0 3 0 3 ,3 0 5 71 9 .4 1 57 2 ,2 8 3 2 ,9 6 2 41 6 .0 155 R e ta il tra d e (D) (D) 9 ,7 4 2 1 37 K 1 49 3 ,0 9 9 3 ,0 1 2 48 1 4 .4 In fo rm a tio n 4 ,4 2 6 1 ,4 2 4 -8 7 H (D) 1 2 ,9 8 5 4 ,8 3 7 -7 3 8 .7 (D) (D) 303 M a n u fa c tu rin g W h o le s a le tra d e D e p o s ito ry in s titu tio n s F in a n c e (e x c e p t d e p o s ito ry in s titu tio n s ) a n d in s u ra n c e R e a l e s ta te a n d re n ta l a n d le a s in g P ro fe s s io n a l, s c ie n tific , a n d te c h n ic a l s e rv ic e s O th e r in d u s trie s (D) (D) (D) 1 1 .8 62 5 9 ,3 9 8 3 ,1 9 4 348 1 7 .0 1 8 4 ,7 4 7 1 8 ,7 0 0 1 ,3 3 5 2 0 .9 (D ) 17,6 81 1 ,5 3 6 197 5 .6 (D) 8 ,2 8 5 (D) (D) 2 .8 4 ,0 1 9 1 5 ,0 9 9 1 ,2 1 8 283 2 .7 1 2 ,5 2 4 3 ,9 7 3 2 ,2 9 6 -7 1 3 .9 (D ) 6 ,4 3 0 2 ,5 81 -6 4 1 7 .4 (D) 4 4 .7 3 3 ,4 6 9 1 5 ,5 7 7 6 ,2 8 5 158 5 9 .8 7 ,6 9 7 1 3 ,9 5 2 ____ (2L ____ (DL p P re lim in a ry r R e v is e d D S u p p re s s e d to a v o id d is c lo s u re o f d a ta o f in d iv id u a l c o m p a n ie s . 1. O n e h e c ta re e q u a ls 2 .4 7 1 a c re s . T h u s , fo r a ll in d u s trie s , a c re s o f la n d o w n e d in 2 0 0 4 w e re 4 1 9 ,9 7 9 a n d in 2 0 0 5 w e re 8 8 ,2 6 7 . N o te s . F o r n e w ly a c q u ire d b u s in e s s e s , th e d a ta c o v e r th e m o s t re c e n t fin a n c ia l re p o rtin g y e a r p re c e d in g a c q u is itio n . F o r n e w ly e s ta b lis h e d b u s in e s s e s , th e d a ta a re p ro je c tio n s fo r th e firs t fu ll y e a r o f o p e ra tio n s . S iz e ra n g e s a re g iv e n in e m p lo y m e n t c e lls th a t a re s u p p re s s e d . T h e s iz e ra n g e s are : A - 1 to 4 9 9 ; F --5 0 0 to 9 9 9 ; G —1 ,0 0 0 to 2 ,4 9 9 ; H —2 ,5 0 0 to 4 ,9 9 9 ; 1 -5 ,0 0 0 to 9 ,9 9 9 ' J - 1 0 ,0 0 0 to 2 4 ,9 9 9 ; K - 2 5 ,0 0 0 to 4 9 ,9 9 9 ; L - 5 0 ,0 0 0 to 9 9 ,9 9 9 ; M - 1 0 0 ,0 0 0 o r m o re . S o u rc e : U .S . B u re a u o f E c o n o m ic A n a ly s is