#171 – Inside Our Industry – The U.S. a Top Draw for FDI from Europe and BeyondPosted on
Area Development’s recent Site & Facility Planning Insider had a perfect lead-in to their newsletter, which we are sharing below. European investment in the United States continues to grow, making “the U.S. the world’s number-one destination for FDI in 2022 for the 10th consecutive year.” Click on the link at the bottom for the full newsletter.
|The U.S. a Top Draw for FDI from Europe and Beyond|
|According to Statista, European FDI to the United States totaled approximately $3.4 trillion dollars in 2022. With high energy prices and economic instability in Europe, many European manufacturers have looked to the U.S. market for relief and are shifting their production here.
Energy prices in Europe spiked in the wake of the Covid-19 pandemic, as well as the lack of Russian natural gas supplies following Russia’s invasion of Ukraine. Geopolitical concerns such as the war in Ukraine, sanctions against Russia, as well as the UK’s withdrawal from the EU single market also pose challenges for European manufacturers. Moving production to the U.S. has helped to lower and stabilize European firms’ energy costs in addition to their logistics costs when serving the vast U.S. consumer market. Further, many European firms cite a more favorable regulatory environment in the U.S. as compared to their home countries as another reason for moving production to the U.S. And then there are the financial incentives offered under the Inflation Reduction Act (IRA)of 2022.
Companies from Europe and elsewhere looking to diversify their production operations made the U.S. the world’s number-one destination for FDI in 2022 for the 10th consecutive year, according to Kearney’s Global Business Policy Council’s 2022 Foreign Direct Investment Confidence Index. In addition to its vast market, the United States’ robust infrastructure and skilled workforce enhance its appeal to foreign investors.