Foreign Direct Investment Trends

In 2004, outlays by foreign direct investors to acquire or establish U.S. businesses rose significantly. Outlays were $79.8 billion, up 26 percent from 2003, when outlays were $63.6 billion. Outlays remained below those in 1998-2001, when new investment outlays were historically high, ranging from $147.1 billion to $335.6 billion.

Transactions of more than $5 billion continued to account for a sizable share of total outlays.In 2004, outlays in depository institutions (banking) increased sharply and outlays in other financial services industries continued to be large, as overseas banks and finance and insurance companies continued to seek access to the profitable and open U.S. financial market. Outlays in manufacturing rose substantially.

Outlays in information declined for the fifth consecutive year. Outlays by Canadian investors increased substantially and accounted for more than 40 percent of total outlays. Outlays from European investors were up slightly, as increases in outlays from the United Kingdom, Switzerland, and France were offset by decreases in outlays from Germany and other European countries. Outlays from Australia decreased. Outlays from Japan declined for the fourth consecutive year.

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