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Blog Category: Bureau of Economic Analysis

U.S. Manufacturing Attracts Foreign Investment

U.S. Manufacturing Attracts Foreign Investment

By Mark Schmit, National Accounts Manager, National Institute of Standards and Technology, Hollings Manufacturing Extension Partnership

The United States is an attractive destination for foreign investment dollars for a variety of reasons, including a large economy with diverse consumer markets, a skilled labor force (thanks to community colleges with skill-development missions as well as research universities) and a predictable and stable regulatory system. These reasons and more explain why the U.S. has been the world’s largest recipient of foreign direct investment (FDI) since 2006 according to an October 2013 White House report, Foreign Direct Investment in the U.S.

Working for NIST’s Hollings Manufacturing Extension Partnership (MEP), I wasn’t surprised to learn that the manufacturing industry is the largest beneficiary of FDI in the United States, accounting for more than one-third of that investment, according to data from the Commerce Department’s Bureau of Economic Analysis. “Made in America” is, after all, a de facto stamp of approval the world over. We are a manufacturer’s dream!

And investments in manufacturing have powerful multiplier effects on the U.S. economy. Every $1 spent in manufacturing generates $1.35 in additional economic activity. Since 1988, MEP has been committed to strengthening U.S. manufacturing and individual manufacturers, contributing to the growth of well-paying jobs, the development of dynamic manufacturing communities, and the enhancement of American innovation and global competitiveness. 

MEP delivers its own high return on investment to taxpayers. For every dollar of federal investment, MEP clients generate nearly $19 in new sales, which translates into $2.5 billion annually. Last year, MEP centers served more than 30,000 manufacturing clients—a subset of which are foreign-owned. For example, since 2012, MEP centers worked on 900 projects with 322 manufacturers in the U.S. that have ownership ties to other countries. These projects helped those companies create and retain more than $700 million dollars in sales, save about $77 million and create or retain more than 6,000 U.S. jobs.