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Foreign Investment Outflows from the United States increase 2.8%

The United States’ Foreign Direct Investment (FDI) abroad increased 2.8% year-on-year in 2019, to reach $ 5.96 trillion.

In general, FDI is an investment made by an entity resident in one economy that represents a lasting interest, defined as 10% or more of voting property, in a company resident in another economy.

The U.S. Direct Investment position abroad, or the cumulative level of investment, increased $ 158.6 billion, to $ 5.96 trillion at the end of 2019, from $ 5.80 trillion at the end of 2018, according to statistics released by the Office of the Economic Analysis (BEA, for its acronym in English).

The result reflected a $ 95.7 billion increase in the position in Europe, mainly in the United Kingdom and the Netherlands.

By industry, manufacturing affiliates accounted for most of the increase in FDI.

Multinational corporations (MNEs) in the United States invest in almost all countries, but their investment in subsidiaries in five countries accounted for more than half of the total position at the end of 2019.

The United States’ FDI position abroad remained the largest in the Netherlands, with $ 860.5 billion, followed by the United Kingdom ($ 851.4 billion) and Luxembourg ($ 766.1 billion).

Canada ($ 402.3 billion) moved up one position from 2018 to be the fourth-largest host economy, placing Ireland ($ 354.9 billion) in fifth.

Foreign investment

By industry of the directly owned foreign affiliate, FDI was highly concentrated in holding companies, which accounted for almost half of the overall position in 2019.

Most holding company affiliates, which are owned by US parents in a variety of industries, have other affiliates that operate in a variety of industries.

By industry of the United States parent company, FDI by multinational manufacturing companies represented 51.9% of the position, followed by multinational companies in finance and insurance (12.8 percent).

US multinationals earned $ 532.7 billion in revenue in 2019 on their cumulative investment abroad, a 2.1% decrease from 2018.

 

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