Greenfield investment into the US remains strong despite the financial markets turmoil and global economic downturn.

The UN Conference on Trade and Development (Unctad) has predicted a 10% reduction in global foreign investment (including M&A) flows in 2008, and the Organisation for Economic Co-operation and Development predicted a sharp decline in 2008.

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But according to fDi Intelligence’s crossborder investment monitor, fDi Markets, inward investment in the first two quarters of 2008 rose by 2.6% compared to the same period in 2007 to $24.07bn, demonstrating that inflows are stable.

The US remained the most appealing inward investment destination in 2007, according to Unctad, with inflows reaching $233bn. But with the UK a close second at $224bn, the US may not retain the global top spot in 2008. fDi Intelligence’s greenfield investment figures show that the UK received slightly more FDI than the US in the first two quarters of 2008 at $24.51bn.

Factors contributing to the steady inward investment in the US include falling asset values (as a result of the credit crunch) proving attractive investment targets. The decreasing value of the dollar, rising wages in emerging economies and an increase in the incentives offered to foreign investors may also result in growing inward investment for the US.

German car maker Volkswagen received a $577m incentive to set up its $1bn car plant in Chattanooga. Another big investment in 2008 recorded by fDi Intelligence was Indian steel company Essar’s announcement that it will build a $1.6bn steel mill in Minnesota’s Mesabi Iron Range, creating 700 jobs. And companies including Fiat, EADS and Rolls-Royce have also been looking at US manufacturing sites.

Further investment opportunities have arisen as US infrastructure is ageing, and contracts are being offered to the private sector. A consortium including Abertis, the Spanish toll road operator, and Citigroup has offered $12.8bn for a 75-year concession to run the Pennsylvania Turnpike. Toll road buy-outs offer predictable cash flows and are easier to finance than corporate deals as the credit crunch continues.