Fourth-quarter 2022 foreign direct investment flows in the United States totaled $72 billion, down 27 percent from third-quarter 2022. Reinvested earnings made up the largest portion of FDIUS at $48 billion, or 67 percent of total FDIUS.
Foreign direct investment in the United States was $318 billion in 2022. The 2022 FDIUS level was the fifth-strongest of the past decade, but was down 21 percent from 2021.
While the United Nations Conference on Trade and Development (UNCTAD) has not yet released its worldwide FDI data for 2022, it noted several troubling trends, including negative or slow economic growth in many countries forecast for 2023 that likely will have a continued negative impact on foreign direct investment this year.
Looking at foreign direct investment more broadly, international companies invest in the United States for many reasons. A list of positive factors includes the large U.S. market, world-class research universities, a stable regulatory regime, and a solid infrastructure that allows businesses to easily access the U.S. market. For certain international investors, the United States has become an important global export platform. Good domestic energy resources also draw international investors to the United States.
These investments benefit the American economy as international firms build new factories across the United States, buoy their well-established U.S. operations, fund American research and development activities, and employ 7.9 million Americans in well-paying jobs.
UNCTAD reported that the United States remained the number one FDI location in 2021 (2022 data have not yet been released). Whether the United States will retain its status as the world’s most attractive investment location hinges on macroeconomic policy decisions, both in the United States and abroad.