The United States’ share of global investment projects has risen to its highest level ever, confirming the country’s stronger economic momentum compared to Europe or China, at a time when Donald Trump will begin his second term in the White House, according to the British Financial Times.
The United States’ share of new foreign direct investment in total global investment increased from 11.6% in 2023 to 14.3% in the 12 months through November 2024, according to a Financial Times analysis of data collected by the newspaper’s FDI Markit, which tracks… Cross-border investments since 2003.
Consumer demand
According to economists, this rise was driven by strong consumer demand and government incentives in the world’s largest economy.
“The US is attracting more and more global investment projects, and this reflects strong demand expectations and much stronger productivity growth than elsewhere,” said Oxford Economics global economist Ennis Macfie.
He expected US investment performance to continue, adding that while US President Trump’s policies create uncertainty, a more flexible budget would drive demand and “add to the reasons to invest in the United States in the near term. Protectionist policies may do the same thing.” “.
Trump is scheduled to deliver a speech before the World Economic Forum in Davos next Thursday remotely, as participants are keen to listen to his economic plans, and the president did not immediately impose higher import duties in the executive orders he issued on the day of his inauguration.
The United States attracted more than 2,100 new foreign direct investment projects in the 12 months to last November, while China attracted nearly 400 projects in the same period, nearly its historic lowest level.
New projects in Germany fell to 470 in the 12 months to November 2024, the lowest figure in 18 years in Europe’s largest economy and a significant decline from 1,100 new investments the previous year.
The newspaper quoted the chief economist at the American Citi Bank, Nathan Sheets, as saying that the American rise was partly due to the country’s importance as a center for innovation in the field of artificial intelligence, low energy costs and investment incentives as part of the inflation reduction law and the chip law of the administration of former President Joe Biden.
China and Europe
At the same time, China’s share of inward foreign direct investment declined due to geopolitical factors, Sheets said, referring to the West’s attempts to “de-risk” China.
Europe’s share fell more sharply, as energy prices on the continent rose after the Russian-Ukrainian war in early 2022 and “cheap energy is attractive to investors,” according to Sheets.
The estimated value of new US foreign direct investment projects announced in the 12 months through November 2024 rose by more than $100 billion to $227 billion, according to FDI Markit, and the data is based on institutional project announcements, press reports and investment estimates. FDI for the life of the project, rather than annual capital expenditure.
62% of foreign direct investment projects in the United States last year came from Western Europe, up from 58% in the 10 years through 2019, the last year before the pandemic.
In contrast, the number of American projects outside the United States shrank to 2,600 in the 12 months until November, the lowest level in two decades except for the peak of the pandemic, and experts said that the Biden administration’s industrial policies stimulated American companies to continue production in the country.
