Overseas Investment by U.S. Manufacturers Declines for Third Straight Year

Deloitte study points to emergence of "global investment divide" as most foreign direct investment goes to higher-wage countries


From a record high of $17 billion in 2000, computer and electronic manufacturers reduced FDI to a mere $900 million in 2002. But global investments rebounded in 2003 to reach $4.6 billion as the technology sector continued to show signs of recovery. Similarly, foreign direct investment into electrical equipment, appliances and components grew to $460 million in 2003 from just $60 million the previous year. "Other manufacturing" increased 15 percent to $10.6 billion in 2003 from $9.3 billion in 2002.

The report pointed out that the ability to manage complexity and synchronize global networks is critical. "The globalization of U.S. manufacturing is at a crossroad as companies struggle to identify the best overseas investment strategies," said Kevin Gromley, a partner with Deloitte Consulting and consulting leader for Deloitte Touche Tohmatsu's Global Manufacturing Industry Group. "Companies that have the capabilities for mastering global complexity over the long run are likely to be much more successful than those that do not."

The complete Deloitte Research study "Globalization Divided? Global Investment Trends of U.S. Manufacturers" study and the related study, "Mastering Complexity in Global Manufacturing: Powering Profits and Growth through Value Chain Synchronization" are available www.deloitte.com/research. These studies were prepared for Deloitte Touche Tohmatsu's Global Manufacturing Industry Group, which is comprised of practitioners from various Deloitte Touche Tohmatsu member firms.

Have an opinion about globalization and the rise of the global supply chain? Supply & Demand Chain Executive is planning a feature article on the global supply chain in its August 2004 issue and is interested in your views and attitudes. Send your thoughts to Andrew Reese, editor, at areese@sdcexec.com.

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