US direct investment abroad position rose by US$212.2B to US$6.58T in 2022, reflecting a US$172.8B increase in the position in Europe, primarily in the UK, Netherlands; foreign direct investment in the US rose by US$216.8B to US$5.25T: Dept. of Commerce

WASHINGTON , July 24, 2023 (press release) –

The U.S. direct investment abroad position, or cumulative level of investment, increased $212.2 billion to $6.58 trillion at the end of 2022 from $6.37 trillion at the end of 2021, according to statistics released today by the U.S. Bureau of Economic Analysis. The increase reflected a $172.8 billion increase in the position in Europe, primarily in the Netherlands and the United Kingdom. By industry, manufacturing affiliates had the largest increase.

The foreign direct investment in the United States position increased $216.8 billion to $5.25 trillion at the end of 2022 from $5.04 trillion at the end of 2021. The increase mainly reflected a $142.2 billion increase in the position from Europe, with the largest increases from the United Kingdom and Germany. By industry, affiliates in manufacturing and wholesale trade accounted for the majority of the increase.

U.S. direct investment abroad (tables 1 – 6)

U.S. multinational enterprises (MNEs) invest in nearly every country, but their investment in affiliates in five countries accounted for more than half of the total U.S. direct investment abroad position at the end of 2022. The position was largest in the United Kingdom ($1.1 trillion), followed by the Netherlands ($0.9 trillion) and Luxembourg ($0.6 trillion). Ireland ($0.6 trillion) and Canada ($0.4 trillion) rounded out the top five.

By industry of the directly owned foreign affiliate, investment was largest in holding companies, which accounted for 47.3 percent of the overall position abroad in 2022. Manufacturing affiliates were second largest, with 15.5 percent, and finance and insurance affiliates were third largest, with 14.0 percent, of U.S. investment. By industry of the U.S. parent, investment by manufacturing MNEs accounted for 50.1 percent of the position, followed by MNEs in finance and insurance (14.4 percent).

U.S. MNEs earned income of $590.4 billion in 2022 on their cumulative investment abroad, a 3.6 percent increase from 2021. Dividends, or repatriated profits, decreased $19.1 billion, or 6.1 percent, to $294.2 billion in 2022.

Foreign direct investment in the United States (tables 7 – 10)

By country of the foreign parent, five countries accounted for more than half of the total foreign direct investment in the United States position at the end of 2022. Japan remained the top investing country with a position of $712.0 billion, followed by the United Kingdom ($663.4 billion), the Netherlands ($617.1 billion), Canada ($589.3 billion), and Germany ($431.4 billion).

By country of the ultimate beneficial owner (UBO), the entity at the top of the global ownership chain, Japan ($775.2 billion) remained the top investing country in terms of position at the end of 2022. Canada ($683.8 billion) was second, and the United Kingdom ($660.6 billion) was the third-largest investing country. On the UBO basis, investment from the Netherlands and Luxembourg was much lower than by the country of foreign parent, indicating that much of the investment from foreign parents in these countries was ultimately owned by investors in other countries.

Foreign direct investment in the United States was concentrated in the U.S. manufacturing sector, which accounted for 42.4 percent of the position. There was also sizable investment in finance and insurance (10.6 percent) and wholesale trade (9.7 percent).

Foreign MNEs earned income of $289.9 billion in 2022 on their cumulative investment in the United States, a 1.7 percent increase from 2021.

Next release: July 2024
Direct Investment by Country and Industry, 2023

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