Location Strategy Insights
2023 REVIEW
INBOUND INVESTMENTS
OUTBOUND INVESTMENTS
CROSS-BORDER INVESTMENTS
2023 Review Foreign Direct Investment into the US
Summary
Corporate cross-border investment into the United States exceeded expectations in 2023. The Biden administration's Inflation Reduction Act has paved the way for the US to stand out.
Job creation increased by 6% across all industry sectors
Asian investments into the US remain strong with South Korea leading the way
The US has benefitted from European and Asian investors looking for alternative investment destinations
The US economy stabilized much faster following the pandemic compared to European counterparts which has led to increased foreign investment.
Eyes are on the upcoming US election and the impact that will have on foreign investment into the US.
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The US will continue to attract a high volume of companies notwithstanding EU’s effort to combat inflation and high interest rates.
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With US interest rates expected to be lowered in the second half of the year, foreign direct investment is poised to increase yet again.
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Constrained land inventory for large projects and pressure on utility capacity and availability will continue to be a concern to growth in the US.
4
Investment into the US has increased by 65% since 2019. Asia invested heavily into the US market in 2023. South Korea led the way with an emphasis in the manufacturing sector yielding a 6% growth in comparison to 2022. Despite being overtaken by Asia, Europe continues to maintain strong ties to the United States; Germany has done exceptionally and seen a 174% growth in job creations.
Outlook
Inbound FDI into the US: Job creation & top 10 - country break down
Switzerland: 3%
Italy: 2%
South Korea: 24%
Germany: 21%
Japan: 12%
Canada: 11%
China: 10%
France: 5%
Australia: 4%
United Kingdom: 8%
2023 Sectoral Breakdown: Manufacturing dominates
2023: Asia is dominating
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Business Services
COLLIERS.COM
Colliers site selection and location strategy experts are stationed in the Americas, Asia-Pacific and EMEA. They combine robust analytics with deep experience to advise on corporate location matters.
Monty Turner Senior Vice President, Principal Site Selection Services monty.turner@colliers.com
Elias Van Herwaarden Head of Location Strategy, Site Selection Services EMEA elias.vanherwaarden@colliers.com
Anthony Burnett Senior Vice President, Principal Site Selection Services anthony.burnett@colliers.com
LOCATION STRATEGY INSIGHTS
2023 Review: Foreign Direct Investment into the US
Job Creation & Sector
The US' manufacturing sector continues to attract the highest volume of foreign direct investment. As companies see the value in the US market and with attractive operating costs and incentives, the sector has increased by 221% since 2020. The logistics sector also saw a steady growth posting a 31% Y.o.Y. increase in 2023.
Hungary: 2%
Other: 7%
Poland: 26%
United Kingdom 19%
Spain: 18%
Germany: 10%
Ireland 6%
France: 4%
Croatia: 3%
Czech Republic: 5%
2023 Review: US Outbound Investment Slowdown
Corporate cross-border investment from the United States into Europe saw a slowdown. The Biden administration’s inflation reduction act coupled with realigning regional supply chains has led to companies becoming more conservative.
Job creation decreased by 35% across all sectors
Asia overtook the US as top investor into Europe
Inflation reduction act has led to US companies re-evaluating European location strategy
Despite the overall slowdown, Europe remains an attractive market for US based companies as it offers a friendshoring alternative with competitive incentives and access to talent.
2023: The Slowdown
All eyes are on the up-coming US election and the impact that will have on foreign investment.
Asia and Europe will remain active targets to U.S. outbound investment as supply chains regionalize
Within Europe, western countries will continue to see investment across the continent as geopolitical uncertainty in the east continues.
US investment into Europe saw a 35% decrease year-over-year. The introduction of the inflation reduction act and increased economic uncertainty saw US based companies choosing to remain in United States. Despite the slow down Poland remained an attractive market for companies. The Czech Republic was the only country to see increased job creation posting a 74% increase.
The European manufacturing sector continued to attract American companies. With high interest rates and inflation, and increased federal incentives, US companies are being more conversative when analyzing their European location strategy. The Business service sector has seen the most dramatic slowdown with a 67% decrease in 2023.
US outbound job creation & top 10 - country break down
United States Outbound Investment: Manufacturing still relevant
Germany: 4%
Portugal: 2%
United Kingdom: 27%
France: 17%
Hungary: 15%
Spain: 9%
Poland: 7%
Serbia: 6%
Sweden: 6%
Ireland: 7%
2023 Review US Outbound Investment Slowdown
2023: The slowdown
2023 Review Foreign Direct Investment into Europe
Job creation growing by 20% across all sectors
Asia accounting for 48% in 2023 of all foreign investment
Continued strong investment into manufacturing operations
Corporate cross-border investment into Europe faced many challenges in 2023. Despite the economic slowdown, it remained strong, with investment from Asia reaching its highest volume since 2019. Highlights include:
Investors are hopeful that inflation and interest rates will stabilize over the course of 2024. This could trigger corporate expansions or relocations.
Despite economic uncertainty companies will continue to invest in Europe.
Site and energy scarcity exacerbated by wage inflation and war for talent calls for robust location strategies.
Lucrative government incentives/subsidies continue to entice company investment. However, the high level of incentives/subsidies may not be here forever.
2023 Review Europe Still in the Mix
2023: The fight for talent
Despite increased uncertainty, job creation grew by 20% in Europe. The UK saw an increased demand for labour as it accounted for 27% of total job creation. The demand for skilled labour in Eastern Europe has steadily increased. Hungary’s lucrative incentives and talent pool has attracted both relocation and expansion projects.
Europe Job creation & top 10 - country break down
A global slow down in the technology sector coupled with high interest rates at the start of 2023 led to a decline in business services centers coming to Europe. The manufacturing sector saw strong results, posting a 33% growth as companies are looking at near-shoring due to continued struggles in global supply chains.
European Investment: Manufacturing still leading the way
