Foreign direct investment in the U.S. increased by 49 percent in 2010, rebounding from 2009 levels during the credit crunch, according to a report by the White House Council of Economic Advisers released today.
President Barack Obama said in an e-mailed statement that his administration’s “open investment policy” has helped fuel economic growth and job creation.
“By voting with their balance sheets, businesses from abroad have clearly stated that the United States is one of the best places in the world to invest,” Obama said in the statement.
Seventeen months before the presidential election, Obama is seeking to convince voters that his economic policies will help lead to long-term growth even as recent data shows the economy is slowing.
Payrolls grew at the slowest pace in eight months in May, Labor Department figures released June 3 showed. Industrial production in the U.S. rose less than forecast in May, restrained by a slump in utility output and shortages of auto parts from Japan.
Consumer purchases in the U.S. rose less than forecast in April as food and fuel prices climbed, and pending sales of existing houses plunged, showing the economy was struggling to strengthen at the start of the second quarter.
The president said foreign direct investment is particularly important “at a time where we need to use every tool in our toolbox to continue to put Americans back to work and grow the economy here at home.”
The U.S., which has the most foreign direct investment of any nation in the world, has been the beneficiary of a growing number of companies with headquarters in other countries doing business in the U.S., including building new warehouses, service centers, and research and development facilities, according to the report.
“This remains the most competitive and most desirable place for investment in the world and that investment has had a great impact on the economy,” said Austan Goolsbee, the head of the White House Council of Economic Advisers, in a conference call with reporters today. Goolsbee said the administration’s foreign direct investment policy could help the president meet his goal of doubling U.S. exports by 2015.
The analysis concludes that the nation’s open economy and low barriers to foreign capital have helped make the U.S. an attractive investment. According to the report, in 2010 almost 90 percent of U.S. inbound foreign direct investment was from corporations based in Canada, Europe and Japan.
Republicans, including former Massachusetts Governor Mitt Romney, the frontrunner for the party’s presidential nomination in several polls, are using recent economic data to make the case that Obama’s economic policies are failing.
Global investors increased their cash holdings to the highest level in a year this month as hedge funds slashed the amount of borrowed money invested in stocks, a survey by Bank of America Corp.’s Merrill Lynch unit showed on June 14.