Summary Estimates for Multinational Companies Released 4/19/10 J. Steve Landefeld, Director April 22, 2010

2 Summary Table - U.S. Multinational Companies Change Employment (millions) U.S. Parents % Foreign affiliates % Capital expenditures ($ billions) U.S. Parents % Foreign affiliates % Sales ($ billions) U.S. Parents9,215.59, % Foreign affiliates4,978.35, % Source: BEA

3 Employment Growth Fastest Abroad Source: BEA

4 Falling Parent Share of MNC Employment Source: BEA

5 Possible Explanations ▪ Resource-seeking  Lower-wage labor  More abundant natural resources ▪ Market-seeking  Liberalization in host government policies toward direct investment  Faster rates of economic growth abroad A shift in the location of production that is:

6 Affiliates Sell Abroad What They Produce Abroad Source: BEA Destination of Sales by Foreign Affiliates

7 Markets Growing Faster Abroad trendline Sources: World Bank and BEA U.S. Share of World GDP

8 Local Markets Important Where Employment is Growing Country of affiliate Employment increase in % of sales to local market All countries+4.9 million59% China+676,00072% Mexico+613,00068% United Kingdom+443,00067% France+283,00067% India+266,00077% Canada+196,00075% Source: BEA

9 Summary Table - U.S. Affiliates of Foreign Multinational Companies Change Employment (millions) % Capital expenditures ($ billions) % Sales ($ billions) 3,353.13, % Source: BEA

10 Little Recent Growth for U.S. Affiliates Source: BEA Employment by U.S. Affiliates of Foreign MNCs

11 Most Growth Occurred in Late 1990’s * Equals nominal outlays deflated by the U.S. GDP deflator; source: BEA. Real Outlays* for New U.S. Affiliates

12 But Output of U.S. Affiliates Continues to Rise

13 EU-Owned Companies Account for Most of Growth Country of UBO Employment increase in Share of increase All countries+814,000100% France+148,00018% Sweden+81,00010% Italy+69,0008% Germany+66,0008% Switzerland+65,0008% United Kingdom+44,0005% UBO: Ultimate beneficial owner; Source: BEA