Top FDI Trends: What’s Driving International Manufacturers to Invest in the U.S.?
With a GDP of $18 trillion and 320 million people, the United States is the world’s largest consumer marketplace. Boasting the most developed capital markets in the world, a highly-skilled workforce and world-renowned research and development (R&D) centers, it’s no surprise that for the fourth year running, the United States also ranked No. 1 in the A.T. Kearney Foreign Direct Investment (FDI) Confidence Index. Likewise, last year was the ninth time in 10 years that the United States recorded more FDI inflow than any other country.
Having attracted some $384 billion in FDI in 2015, the United States' competitive advantages are hard to argue—and manufacturers are eager to capitalize on this. So, what are the top trends boosting FDI?
1. Low-cost energy: The U.S. has been the world’s top producer of natural gas since 2011 and the world’s top producer of petroleum hydrocarbons since 2013. This abundance of energy offers the stability in energy costs that our customers are looking for.
2. Optimal business climate: The U.S. is consistently ranked among the best worldwide for overall competitiveness and ease of doing business. Factors such as the Open Investment Policy, a transparent and stable legal system and our nation’s encouragement of free enterprise and competition, invite international companies to join our country’s robust marketplace.
3. Just-in-Time delivery: Major OEMs are requiring suppliers to be in relatively close proximity to their manufacturing plants. This has resulted in a new wave of tiered suppliers in the market from several foreign companies.
4. Leader in consumer spending: According to data cited by SelectUSA, United States consumers account for more than a fourth of the entire world’s household consumption. In addition, through free trade agreements U.S.-based businesses are able to connect with 20 additional countries, providing increased access to more than 760 million consumers.
5. Skilled workforce: America is home to a highly educated workforce that’s among the world’s most productive. In fact, according to The Conference Board’s Total Economy Database, the output per hour of the American worker is some 25 percent above the average of the world’s mature economies. This—along with our government’s commitment to strengthening our already strong workforce through world-class workforce development programs such as the U.S. Department of Labor’s American Apprenticeship Initiative—make our nation’s workforce an attractive consideration for foreign investors.
6. Hub for innovation: In today’s disruptive digital era, companies risk extinction if they fail to innovate. And, for companies that wish to stay ahead of the innovation curve, there’s no better place to be than the United States. As a world leader in research and development (R&D) and intellectual property protection, the U.S. fosters an innovation culture like no other. Accounting for more than a quarter of the world’s R&D expenditures and almost three percent of GDP, the U.S. is among the top five global innovators.
Gray Construction will be at SelectUSA’s 2016 Investment Summit in Washington, D.C., June 19-21, ready to discuss how our integrated design-build solutions can benefit foreign investors seeking to build advanced manufacturing facilities in the United States. Stop by booth #706 to learn how we’ve built close to 500 facilities across the country for international customers.