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Foreign Direct Investors' Spending to Acquire or Establish U.S.
Businesses Fell Sharply in 2001 from a High Level
Spending by foreign direct investors to acquire or establish businesses in the United
States decreased 60 percent in 2001, from an exceptionally high level of $335.6 billion in 2000
to $132.9 billion in 2001. The decrease reflected weakness in the U.S. and world economies and
a sharp drop in overall merger and acquisition activity worldwide. Despite the decrease, outlays
were still higher than in any year prior to 1998. The sharp decrease in outlays followed three
years of unprecedented spending for new investments.
Outlays fell sharply in telecommunications and other high-tech industries, where U.S.
business conditions were particularly weak. However, outlays remained strong in "finance
(except depository institutions) and insurance," particularly in insurance, as foreign investors
continue to be attracted by the large and expanding U.S. life insurance market. Outlays by British
investors plunged to $16.6 billion from $110.2 billion in 2000 and were substantially lower than
in the three previous years, when they were boosted by a few especially large investments in
high-tech industries and petroleum.
Businesses Fell Sharply in 2001 from a High Level
Spending by foreign direct investors to acquire or establish businesses in the United
States decreased 60 percent in 2001, from an exceptionally high level of $335.6 billion in 2000
to $132.9 billion in 2001. The decrease reflected weakness in the U.S. and world economies and
a sharp drop in overall merger and acquisition activity worldwide. Despite the decrease, outlays
were still higher than in any year prior to 1998. The sharp decrease in outlays followed three
years of unprecedented spending for new investments.
Outlays fell sharply in telecommunications and other high-tech industries, where U.S.
business conditions were particularly weak. However, outlays remained strong in "finance
(except depository institutions) and insurance," particularly in insurance, as foreign investors
continue to be attracted by the large and expanding U.S. life insurance market. Outlays by British
investors plunged to $16.6 billion from $110.2 billion in 2000 and were substantially lower than
in the three previous years, when they were boosted by a few especially large investments in
high-tech industries and petroleum.