Many parts of the US economy suffered as a result of the global recession, yet FDI into the country held strong, with year-on-year figures continuing to increase. Data from greenfield investment monitor fDi Markets shows that although 2009 was a record FDI year for the US, its performance in the first six months of 2010 suggests that this year's numbers will be higher still.
In order to analyse what affect the recession had on FDI trends, it is important to compare the performance of US states in the 21 months before October 2008 to the 21 months since.
Between October 2008 and June 2010, the US attracted a combined 6091 inward FDI projects (including interstate investments) which resulted in the creation of an estimated 660,710 jobs, along with a combined investment of $338.7bn. These figures represent a 58% increase in project numbers and a 29% increase in job creation when compared to the 21-month period between January 2007 and September 2008. Despite overall promising figures, the recession has had an effect on the structure of FDI projects locating in the US. The average project in the 21 months before October 2008 involved an investment of $71m and the creation of an estimated 132 jobs. In the 21 months since October 2008, fDi Markets' records show that the average capital investment per project fell to $54.6m with an average of 107 jobs created.
California leads the way
California, Texas and New York ranked as the top destination states for investment projects (including interstate) between October 2008 and June 2010. Together these three states accounted for a quarter of all FDI into the US.
In the 21-month period since October 2008 an extra 250 projects (including interstate) located in California. In previous years California consistently attracted more FDI projects than any other US state. When examining the figures subsequent to October 2008, California attracted 65% more projects, which together represented a total of 637 projects, consisting of $19bn-worth investment and the creation of an estimated 45,910 jobs.
More jobs for New York
Texas ranked as the second most popular destination state followed by New York when it comes to investment projects (including interstate). The number of projects into Texas increased by 247 in the 21 months since October 2008 whereas New York attracted 164 more projects when compared to the 21 months before October 2008. Projects into the state of New York resulted in the largest job creation increase, with 17,639 more jobs created when compared to the 21 months prior to October 2008.
California, New York and Texas were the top three destination states for FDI (when excluding interstate projects) whereas California, Texas and Florida were the top destination states for interstate investment only between October 2008 and June 2010.
Some notable shifters include Connecticut, which climbed 13 places to be ranked as the 29th most popular state for projects (including interstate). In the 21 months previous to October 2008, Connecticut attracted 27 projects but, despite the global recession, it managed to attract 30 more projects in the 21 months subsequent to October 2008. Project numbers for Kansas more than doubled, attracting 71 prior to October 2008 compared to only 33 in the 21-month period before. Colorado also improved its performance, attracting 144 projects in the 21 months before October 2008 compared to only 71 in the 21 months prior.