ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, July 10, 1996 TAG: 9607100044
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Foreigners poured $54.4 billion into the United States last year to buy business operations. It was the third straight year foreign direct investment has increased.
The Commerce Department said direct spending by foreigners to acquire or establish U.S. businesses climbed 19.2 percent from a revised 1994 level of $45.6 billion.
German companies led the way, recording more than a fourfold increase to push that country's total to $14.2 billion.
While the overall investment total marked the third straight annual gain, in percentage terms it was far below the huge jumps of 74 percent in 1994 and 71 percent in 1993. Still, the advance pushed total investment for the year to the highest level since 1990, when foreigners spent $65.9 billion acquiring U.S. operations. The all-time high for foreign investment was $72.7 billion in 1988.
That was when Japan surged to the front as the biggest buyer of U.S. assets, triggering fears that Americans were losing control of their economic destiny to foreigners.
However, many of the Japanese acquisitions, especially in real estate, have not done well, and Japanese companies, faced with a recession at home, have been cutting back. For 1995, Japanese investment totaled $3.8 billion, only one-fifth of its 1990 peak of $19.9 billion. And economists said Americans now realize the benefit of foreign factories hiring U.S. workers.
Britain was in second place with investments totaling $9.7 billion, down 44 percent from 1994. Canada was in third with new investment of $6.5 billion, up 57 percent.
The report attributed the 1995 increase in part to a falling dollar, which dipped to record lows against both the Japanese yen and German mark early in the year. Record-high levels for corporate profits, which attracted overseas investors, also were cited.
The weaker dollar made it cheaper for foreign firms to make U.S. investments and more attractive for them to move production facilities to the United States.
LENGTH: Short : 50 linesby CNB