Sterling Assets: British Investment Creating U.S. Jobs. A U.S. and State-by-State Analysis

Transcription

1 Sterling Assets: British Investment Creating U.S. Jobs A U.S. and State-by-State Analysis

2 About the Confederation of British Industry (CBI) The CBI is the premier lobbying organisation for UK-based businesses on national and international issues. Our mission is to promote the conditions in which business can compete and prosper. We are an independent, non-partisan political organisation, funded entirely by our members in industry and commerce. We speak for some 240,000 businesses that together employ around a third of the United Kingdom private sector workforce. Our members come from every sector of the British economy, and from all regions of the. They are both UK- and foreign-owned. Our membership includes 80 of the FTSE 100, some 200,000 small and medium-sized firms, more than 20,000 manufacturers and over 150 sectoral trade associations. About the Washington Office of the CBI The CBI opened an office in Washington, DC in This was the CBI's first office outside Europe, reflecting the fact that the 's most important bilateral economic relationship is with the United States. The Washington office provides a base from which we can promote our members' interest to a U.S. audience. We provide a range of services to member companies, whether in the UK, the U.S. or elsewhere, including: Information on the latest legislative, regulatory, and economic developments in America. Lobbying on issues of particular importance to our member companies. This includes a broad range of policy areas, such as trade and investment policy, tax, environment, and corporate governance. Networking opportunities, to help those on both sides of the Atlantic --- whether in the business or political communities --- understand how to increase the flow of transatlantic business. Contact information Rhian Chilcott Head of the Washington Office The CBI 1110 Vermont Ave, NW, Suite 1200 Washington DC, USA Tel: Fax: Copyright 2008 by the Confederation of British Industry All rights reserved. No part of this work covered by the copyrights hereon may be reproduced or copied in any form or by any means (graphic, electronic, or mechanical, including photocopying, recording, taping, or information storage and retrieval systems) without written permission from the Confederation of British Industry. Every reasonable effort has been made to assure the accuracy of the information in this publication. However, the contents of this publication are subject to changes, updates, omissions, and errors, and neither the Confederation of British Industry nor Content First, LLC accepts any liability for inaccuracies that may have occurred. 2

3 FOREWORD This is a report about the real special relationship between Britain and America. Over the years, there has been much speculation about whether the special relationship actually exists. Deep analysis of the friendships of individual politicians in London and Washington... discussion about the lofty goals of foreign policy and diplomacy... worried debate about whether the UK can be friends with the U.S. and the European Union (EU) at the same time... This report suggests that these things are, in a sense, irrelevant. There is a special relationship --- and it's an economic one. The UK is the largest overseas investor in the United States. British investment supports nearly one million American jobs. The U.S. subsidiaries of British companies --- from household names like BP, Rolls Royce, or National Grid to thousands of small companies you've never heard of --- are inextricably woven into the fabric of the American economy. This report presents the bare statistics on British investment in America. It uses key metrics such as jobs, research and development (R&D) expenditures, and capital stock investment to show how British companies are contributing to U.S. growth and prosperity. It shows that no single part of the United States is left untouched by British investment: even here in Washington, DC, British companies employ 5,200 people --- including, I'm delighted to say, three of us here in the CBI office! Sterling Assets is a unique report, because it provides both a U.S. overview and a state-by-state breakdown of British investment in America. It permits us to showcase this very special relationship. As Head of the Washington Office of the CBI, I am delighted to present the first edition of this report. Rhian Chilcott The CBI, Washington, DC April

4 TABLE OF CONTENTS FOREWORD 1 EXECUTIVE SUMMARY 3 PROMOTING BRITISH INVESTMENT IN THE AMERICAN ECONOMY 6 U.S. KEY FINDINGS 8 STATE KEY FINDINGS 12 UNITED STATES PROFILE 16 STATE PROFILES 17 METHODOLOGY 68 2

5 EXECUTIVE SUMMARY U.S. subsidiaries of British-owned firms play a vital role in the U.S. economy. Many of the larger British companies investing in America are household names --- the likes of BP, Rolls Royce, GlaxoSmithKline, and HSBC. Thousands of others are less well-known, but together, they are all contributing to the economic well-being of the United States. It's not surprising that British companies are attracted to America. They appreciate the size of the market, a culture that fosters innovation and risk-taking, the deep capital markets, and the pool of talented workers. A common language as well as similar legal systems and cultural norms make it easy for Brits and Americans to work together. Historically, British companies have invested heavily in the United States. So, today, Britain is the largest foreign investor in America. As of yearend 2006, the UK has $303 billion invested here, which is 16.9 percent of the nearly $1.8 trillion of foreign direct investment (FDI) in America. Investment by the UK is substantially higher than other large foreign investors, including Japan ($211 billion), Germany ($203 billion), the Netherlands ($189 billion) or Canada ($159 billion) (Fig. 1). In stark contrast, China's investment is extremely tiny; it doesn't even reach one percent of all foreign direct investment in the United States, at only $554 million as of year-end Fig. 1 Foreign Direct Investment in the United States, 2006 Investment* TOTAL $1.8 T 1. $303 B 2. Japan $211 B 3. Germany $203 B 4. Netherlands $189 B 5. Canada $159 B *These statistics are shown on a historical cost basis. Fig. 2 Insourced Jobs by Foreign Affiliates, British investment is spread right across the United States. Every single state in America has workers in jobs that are created and sustained by British companies. In total, they employ nearly one million American workers. And again, the UK tops the list when compared to other foreign investors: there are some 5 million insourced jobs in America (i.e., jobs created by the U.S. subsidiaries of foreign-owned companies), and of these, 18 percent are supported by British investment. In, the most recent year for which data are available from the U.S. government, there were 907,800 jobs supported by U.S. subsidiaries of British companies. Comparatively, British-owned foreign affiliates supported over a quarter of a million more jobs than German-owned companies operating in the United States, and almost 300,000 more jobs than Japanese-owned subsidiaries located in the United States (Fig. 2). British investment is equally diverse in sectoral terms. British business has invested heavily in key sectors of the American economy. For instance, at nearly $77 billion, the British are large investors in the U.S. manufacturing sector, just behind Switzerland and Germany. Other leading sectors of the U.S. economy that benefit from British investment include wholesale trade, where British investment reached more than $60 billion in Additionally, British firms have invested over $19 billion in the information sector (Fig. 3). 3

6 EXECUTIVE SUMMARY Fig 4. Employment Generated by Selected Industry of, British-Owned Affiliates as a % British-Owned All Foreign of Total Foreign Industry Affiliates Affiliates Affiliates Employment All industries 907,800 5,085,700 18% Other industries* 330,600 1,342,300 25% Manufacturing** 286,600 1,986,600 14% Wholesale trade 101, ,800 18% Information 73, ,900 35% Professional, scientific, and technical services 68, ,100 35% Retail trade 23, ,100 4% Finance (except depository institutions) and insurance 17, ,700 9% and rental and leasing 6,600 48,100 14% * Other industries include such sectors as agriculture, mining, utilities, transportation, and construction. ** industry differs from state-level industry employment because of differences in the BEA data collection process. Fig. 3 British Investment in the United States, by Select Sector, 2006* *These statistics are shown on a historical cost basis Note:, computers/electronics, and transportation equipment are part of the manufacturing sector The manufacturing sector accounted for over 30 percent of the 907,800 jobs generated by British-owned affiliates, with manufacturing employment totalling 286,600 nationwide in. Affiliates owned by British firms accounted for more than 100,000 jobs in the wholesale trade sector and there were 73,300 jobs supported by British-owned affiliates in the U.S. information sector (Fig. 4). Another indication of the high level of engagement by British companies in the American economy is their involvement in U.S. exchanges. At the end of 2006, British companies comprised 5.5 percent of the 1,145 foreign companies listed on the New York Stock Exchange, the Nasdaq Global Stock Market, the Nasdaq Capital Market, or the Over-the-Counter Market. There were 63 British companies registered and reporting with the U.S. Securities and Exchange Commission (SEC) in 2006: although this was behind Canada and Israel, it put the UK well ahead of other major countries such as Japan, France, and the Netherlands. British companies listed on U.S. exchanges vary from airlines like British Airways to the media giant WPP; high-tech pharmaceutical and telecoms companies like AstraZeneca and BT to hotel chain InterContinental (owner of the Willard here in DC). These companies all appreciate the deep and liquid capital pools that the United States has to offer; U.S. investors appreciate the portfolio diversity and dynamism that they bring (Fig. 5). BRITISH INVESTMENT IS HIGH END AND HIGH PAYING A range of objective indicators show the vibrancy of British firms in the American marketplace. For example, U.S. subsidiaries of British-owned companies operating in the United States generated a total payroll of $58.7 billion in (Fig. 6). That means the average annual compensation 4 Fig. 5 Foreign Companies Registered and Reporting with the U.S. Securities & Exchange Commission, 2006 Number of Companies* TOTAL 1, Canada Israel Cayman Islands Brazil Japan Bermuda France Netherlands Mexico 25 *These statistics reflect the total number of foreign companies registered with the SEC on the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), the Nasdaq Global Stock Market (GLOBAL MKT), the Nasdaq Capital Market (CAP MKT), and the Over-the-Counter Market (OTC).

7 EXECUTIVE SUMMARY (wages and benefits) of a worker in a British-owned company was $64, compared to the annual compensation of the average American worker, which was approximately $50,000. Gross capital stock investment of over $207 billion by British subsidiaries in U.S. property, plant, and equipment also adds value to each state economy, and contribute to the quality of life in the United States. Furthermore, British subsidiaries invested $12.8 billion in commercial real estate in, representing 9 percent of the $145 billion in commercial property investment by foreign affiliates in the United States. Fig. 6 Leading Countries in Compensation Paid by Foreign Affiliates British subsidiaries also contribute to America's research and development (R&D) base. British-owned companies spent nearly $6 billion on R&D in, representing almost 20 percent of the $32 billion in R&D performed by foreign affiliates located in the United States in, the most recent year for which data are available. These R&D activities help to spur the discovery of new products and processes, generating economic growth and improvements in the quality of life. British subsidiaries also help the U.S. trade balance. Foreign-owned affiliates operating in the United States exported $169.2 billion of goods from America in ; of this, some $17.7 billion or 10.5 percent, were made by British subsidiaries. And the UK is, of course, a major destination for all U.S. exports: today, Britain is the fifth largest merchandise export market for the United States, behind Canada, Mexico, China, and Japan (Fig. 7). A NOTE ON SOURCES AND STATISTICS The first section of Sterling Assets: British Investment Creating U.S. Jobs provides key findings on the economic impact of U.S. subsidiaries of Britishowned businesses from a national perspective. The second section consists of British business profiles for each state and the District of Columbia. Fig. 7 United States Export Destinations (In Billions of U.S. Dollars) This study presents the most recently available U.S. government statistics on the business activities of British-owned companies in the United States, at the time this study was prepared for the Confederation of British Industry. The national and state-by-state statistics refer only to the business activities of U.S. subsidiaries of British companies that are unambiguously under British control (that is, British affiliates that are more than 50 percent owned by British direct investors, known as majority-owned affiliates). The statistics reported here represent a conservative measure of the overall impact of foreign direct investment by majority-owned British companies on the U.S. economy. The data do not capture the full economic impact of investments by these firms, but rather serve as a floor. The export statistics in this report are based on merchandise exports from the United States to the on a national and state-by-state basis. They are compiled from the most recently released annual statistics produced by the U.S. Department of Commerce's Office of Trade and Economic Analysis. 5

8 PROMOTING BRITISH INVESTMENT The purpose of this report is to illustrate how extensive British investment in the United States already is, and what a major contribution it makes to American prosperity. But that investment could be larger still... or, more negatively, it could shrink: we cannot take our special relationship for granted. It is therefore worthwhile outlining some of the policy areas in which the CBI believes the U.S. government could take steps to ensure America's ongoing attractiveness as a place to invest and do business. Many of the policy prescriptions that the CBI would make are similar to those that would come from a U.S. business organization like the Business Roundtable or the National Association of Manufacturers. So here, we restrict ourselves to particular areas where we think the U.S. government can take actions that are particularly beneficial to encouraging British investment in American jobs and growth. The headlines are: Investment policy The United States has a long history of welcoming foreign investment. But it must make sure that this tradition is upheld. --- The Committee on Foreign Investment in the United States (CFIUS) regime is there to ensure that valid concerns about national security can be addressed, but without causing discrimination against potential foreign investors in the United States. It must be allowed to operate properly, without political interference. --- New investment vehicles, such as sovereign wealth funds (SWFs), create new opportunities as well as challenges. The U.S. government should work in collaboration with others [e.g., the International Monetary Fund (IMF) and the Organization for Economic Co-operation and Development (OECD)] on appropriate governance frameworks for SWFs, so the U.S. economy will reap the full benefit of their potential input. Trade policy The United States can also be proud of its role as a champion of open markets, and a leader in world trade negotiations. But those negotiations are at a critical point, so U.S. leadership is more necessary than ever. --- The United States, and all governments, must demonstrate the political bravery to bring about a successful conclusion to the Doha Development Agenda (DDA) negotiations at the World Trade Organization (WTO) by the end of Similarly, the United States, and all governments, must abide by the rulings of the WTO's dispute resolution mechanisms. --- The United States should seek to avoid using trade policy, in particular unilateral sanctions, as a method of foreign policy. This is both ineffective and actually damaging to U.S. interests. --- Both at a federal and a state level, the United States should avoid the temptation to restrict government procurement to domestically produced goods and services. Buy America policies don't deliver best value outcomes for U.S. taxpayers. Tax policy All over the world, governments are seeking to shore up their revenue bases, at a time when capital and labor are both more mobile than ever. They must be careful in doing so. --- The U.S. government should not view foreign subsidiaries as an easy target for 6

9 IN THE AMERICAN ECONOMY revenue-raising, with no political downside. As this report demonstrates repeatedly, foreign direct investment brings considerable economic benefits to the U.S.: it should be nurtured, not attacked. --- The UK-U.S. Tax Treaty is up for renewal during Both governments should consult with their business communities to see how it can be improved as a tool to encourage transatlantic business. Regulatory cooperation In historic terms, tariff barriers are slowly being removed from world trade. But often, they are being replaced by non-tariff barriers, in the form of standards or regulations. It is therefore increasingly important that governments cooperate to prevent them from becoming pernicious barriers to growth. The new Transatlantic Economic Council (TEC) is a useful framework for discussing these issues. --- The steps that the Financial Accounting Standards Board (FASB) and the SEC are taking in collaboration with the International Accounting Standards Board (IASB) and European market regulators are very useful (e.g., scrapping the reconciliation requirement). Their efforts to create a barrier-free transatlantic capital market should be encouraged. --- Increasing security measures relating to goods shipments are causing friction in transatlantic trade. The U.S. government should reconsider its 100 percent cargo scanning requirement, which is not a risk-based approach. The 10+2 rule should also be subject to a longer consultation. --- A whole host of regulatory issues relating to privacy and data protection bedevil transatlantic business relations. These should be addressed. --- The proliferation, and variance, of antitrust regulators around the world is another area of growing concern to companies working transatlantically. Workforce policy Overseas investment can be captured by numbers --- but in the real world, it's about people. A vibrant FDI sector therefore depends on companies being able to deploy their skilled staff around the world, wherever they are needed. --- The U.S. government should significantly increase the annual cap on the number of H-1B visas it grants to skilled workers. --- The United States should also work with other governments to ensure that security measures put in place to monitor the movement of foreign nationals in and out of the U.S. have the least possible negative impact on genuine business travellers. --- No matter how close the and the United States become economically, there is still an ocean between us! Moving people between the two countries would be cheaper if the U.S. took steps to liberalize its air services market --- as it has committed to do under stage 2 of the recent Open Skies deal. Taken together, these steps would help to ensure that British business, and other non-u.s. companies, can continue to invest in America, source and sell goods here, deliver their services, and undertake research. They can continue to create good American jobs and contribute to American prosperity, while prospering themselves: a real win-win outcome. 7

10 U.S. KEY FINDINGS Sterling Assets: British Investment Creating U.S. Jobs measures the economic contribution of British-owned affiliates in the United States using the best available data from the U.S. government. A quick snapshot of a few statistics provides clear and compelling evidence of the high-level of engagement by British-affiliated firms operating throughout the United States. British-owned affiliates create U.S. jobs, with employment totaling 907,800. British-owned affiliates help to boost U.S. wages because they pay higher wages than U.S. companies, with an annual compensation per American worker of $64,636. British-owned affiliates strengthen the U.S. economic base by investing in property, plant, and equipment, with capital stock investment of more than $207 billion. British-owned affiliates contribute to the U.S. gross domestic product, with almost $110 billion in valued added. British-owned affiliates support R&D in the United States, with nearly $6 billion in R&D expenditures. British-owned affiliates support U.S. exports to the British market, with U.S. merchandise exports to the reaching $50 billion in. British-owned affiliates accounted for $17.7 billion in U.S. exports to the world, representing 10.5 percent of all merchandise exports by U.S. affiliates. TOP COUNTRIES IN VALUE- ADDED BY U.S. AFFILIATES OF FOREIGN COMPANIES TOTAL $540 B 1. $110 B 2. Japan $70 B 2. Germany $66 B 4. France $48 B 5. Netherlands $44 B U.S. GROSS DOMESTIC PRODUCT (GDP) CONTRIBUTION BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES British-owned affiliates make an important contribution to the American economy and represent a substantial economic presence in the United States. British-owned affiliates contributed nearly $110 billion in value-added to the U.S. economy in, accounting for 20 percent of value-added by all foreign affiliates and 1 percent of total U.S. value-added in private industries. The accounted for the largest share of affiliate value-added, ahead of Japanese, German, and French-owned affiliates with the second, third, and fourth largest shares of affiliate value-added, at 13 percent, 12 percent, and 9 percent, respectively, in. AMERICAN JOBS SUPPORTED BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES The economic impact of British-affiliated firms is best captured by considering the tens of thousands of American jobs sustained by the business activities of British-owned businesses operating in the United States. TOP COUNTRIES IN EMPLOYMENT SUPPORTED BY U.S. AFFILIATES OF FOREIGN COMPANIES Employment TOTAL 5,085, , Germany 654, Japan 613, France 473, Netherlands 441,800 U.S. subsidiaries of British-owned companies employed 907,800 Americans in. 8

11 U.S. KEY FINDINGS these British subsidiaries represented 18 percent of the almost 5.1 million jobs supported by all U.S. subsidiaries of foreign companies in the United States in. The ranks first in American jobs supported by their U.S. subsidiaries in, far ahead of the 775,300 jobs sustained by U.S. subsidiaries of firms from all the Asia-Pacific nations combined, and well ahead of other European countries such as Germany, France, and the Netherlands. British-owned affiliates employed over 150,000 more American workers than U.S. subsidiaries of Asia-Pacific firms (comprising such Asian-Pacific countries as Australia, China, India, Japan, Singapore, and Taiwan in ). AMERICAN MANUFACTURING JOBS SUPPORTED BY U.S. SUBSIDIARIES OF BRITSH- OWNED COMPANIES The U.S. manufacturing employment base reaps enormous benefits from the investments made by U.S. subsidiaries of foreign firms, including British firms, in the American market. Some 1.5 million U.S. manufacturing jobs were supported by the operations of U.S. subsidiaries of majority-owned foreign companies in. TOP COUNTRIES IN MANUFAC- TURING EMPLOYMENT SUPPORTED BY U.S. AFFILIATES OF FOREIGN COMPANIES Employment TOTAL 1,537, Japan 282, Germany 235, , France 137, Canada 116,600 U.S. subsidiaries of British-owned companies supported 211,300 American manufacturing jobs nationwide in. These British-owned affiliates represented nearly 14 percent of the U.S. manufacturing jobs generated by all U.S. subsidiaries of foreign firms in. Manufacturing employment supported by U.S. subsidiaries of British-owned businesses ranked third in jobs behind the employment supported by the manufacturing operations of U.S. subsidiaries of Japanese-owned firms and the U.S. subsidiaries of German-owned firms in. Together, the U.S. subsidiaries of companies from Japan, Germany, and the accounted for nearly 50 percent of all the manufacturing jobs supported by the U.S. subsidiaries of these foreign-owned affiliates in. COMPENSATION BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES British-owned affiliates make a substantial contribution to the payroll of the U.S. workforce. Compensation paid by British-owned affiliates to their U.S. workforce totaled $58.7 billion, comprising 17 percent of the $335.9 billion in compensation paid by all foreign affiliates. British-owned affiliates ranked first among foreign-owned affiliates in compensation ahead of subsidiaries from Germany, Japan, Switzerland, and France. The average annual compensation (wages and benefits) per worker paid by British-owned affiliates was $64,636 in. LEADING COUNTRIES IN COMPENSATION PAID BY FOREIGN AFFILIATES Compensation TOTAL $335.9 B 1. $58.7 B 2. Germany $48.2 B 3. Japan $41.9 B 4. Switzerland $32.3 B 5. France $32.2 B 9

12 U.S. KEY FINDINGS CAPITAL STOCK INVESTMENT BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES Another indication of the powerful economic impact that British companies have in the U.S. market is the level of their gross capital stock investment activities in U.S. property, plant, and equipment. Over $207 billion was attributable to capital stock investment by U.S. subsidiaries of British companies as measured by their investment in gross property, plant, and equipment in. This represents 19 percent of all capital stock investment by U.S. subsidiaries of all foreign companies operating in the United States in. Capital stock investment by British-owned subsidiaries were slightly below the capital stock investment by German-owned subsidiaries in gross property, plant, and equipment at $209 billion and ahead of Japanese capital stock investment at $162 billion in. REAL ESTATE INVESTMENT BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES U.S. subsidiaries of British-owned firms are also responsible for a significant amount of real estate investment in the United States. U.S. subsidiaries of British-owned companies invested nearly $13 billion in real estate, comprising 9 percent of the $145 billion in real estate investment by all subsidiaries of foreign firms in. U.S. subsidiaries of British-owned companies' level of investment in real estate placed it fifth among all U.S. subsidiaries, behind Japan, Germany, Australia, and Canada. TOP COUNTRIES IN CAPITAL STOCK INVESTMENT* BY U.S. AFFILIATES OF FOREIGN COMPANIES, Capital Stock Investment TOTAL $1,092 B 1. Germany $209 B 2. $207 B 3. Japan $162 B 4. Canada $104 B 5. Netherlands $71 B * Capital stock represents fixed tangible assets (gross property, plant, and equipment). TOP COUNTRIES IN REAL ESTATE INVESTMENT BY U.S. AFFILIATES OF FOREIGN COMPANIES, Real Estate Investment TOTAL $144.8 B 1. Japan $27.0 B 2. Germany $22.8 B 3. Australia $15.4 B 4. Canada $14.9 B 5. $12.8 B R&D EXPENDITURES BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES British-owned affiliates make a substantial contribution to the American R&D base, resulting from their significant R&D expenditures in the United States. British-owned affiliates performed nearly $6 billion in U.S. R&D expenditures in, representing 19 percent of the $32 billion in U.S. R&D performed by majority-owned affiliates of foreign companies located in the United States. British-owned affiliates R&D expenditures were slightly behind the $6.3 billion in R&D performed by German-owned affiliates in the United States. EXPORTS FROM THE UNITED STATES TO THE UNITED KINGDOM Subsidiaries of British companies operating in the United States not only produce for the American market, they also contribute to U.S. exports to overseas markets. Thus, they play an important role in U.S. trade flows. Without a doubt, the presence of British subsidiaries in the United States bolsters American TOP COUNTRIES IN RESEARCH AND DEVELOPMENT PERFORMED BY U.S. AFFILIATES OF FOREIGN COMPANIES, R&D Performed TOTAL $31.7 B 1. Germany $6.3 B 2. $6.0 B 3. Switzerland $4.3 B 4. France $4.1 B 5. Japan $3.4 B 10

13 U.S. KEY FINDINGS exports to the. The presence of British subsidiaries in the United States supports $50 billion in American goods exports to the United Kingdom in. U.S. merchandise export data show that the is the fifth leading export market for U.S. companies worldwide, with American businesses selling everything from transportation equipment, chemicals, and computers and electronic products to primary metals and machinery. Specifically, British-owned affiliates accounted for 10.5 percent, or $17.7 billion, of the $169.2 billion in total exports generated by foreign-owned affiliates operating in the United States in. This is behind the $42.7 billion in U.S. exports generated by Japanese-owned affiliates and the $33.9 billion in U.S. exports generated by German-owned affiliates. Foreign-owned affiliates accounted for nearly 19 percent of the $904 billion in U.S. exports. TOP COUNTRIES BY U.S. MERCHANDISE EXPORTS, Merchandise Exports TOTAL $1,162.7 B 1. Canada $248.4 B 2. Mexico $136.5 B 3. China $65.2 B 4. Japan $62.7 B 5. $50.3 B 6. Germany $49.7 B 7. South Korea $34.7 B 8. Netherlands $33.0 B 9. France $27.4 B 10. Taiwan $26.4 B U.S. merchandise exports to the totaled $50 billion in. U.S. exports to the represented 4.3 percent of the $1.2 trillion in exports from the United States to the world in. U.S. exports to the were less than American goods exports to Japan of $63 billion, and far below the large export sales total of $137 billion to Mexico in and dwarfed by the $248 billion in goods exports sold to Canada in. Within the European Union, the was the leading national market, just slightly ahead of the $49.7 billion in exports sold to Germany and greater than the $33 billion in U.S. exports to the Netherlands in. The leading exports from the United States to the in were transportation equipment ($9.0 billion), chemicals ($7.1 billion), and computers and electronic products ($6.5 billion). TOP COUNTRIES IN GOODS EXPORTS BY U.S. AFFILIATES OF FOREIGN COMPANIES % of Total Foreign Affiliate Exports Exports TOTAL $169.2 B 1. Japan $42.7 B 25.2% 2. Germany $33.9 B 20.0% 3. $17.7 B 10.5% 4. France $11.6 B 6.8% 5. Netherlands $10.6 B 6.3% 11

14 STATE KEY FINDINGS Sterling Assets: British Investment Creating U.S. Jobs provides comparative statistics on the economic impact of the business operations of U.S. subsidiaries of British-owned companies in all 50 states and the District of Columbia. Britishowned affiliates create jobs in every U.S. state. California was the nation's leading state in employment supported by British-owned subsidiaries, followed by New York, Texas, Illinois, and Pennsylvania. STATE EMPLOYMENT BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES California ranked first nationwide in the number of workers employed by subsidiaries of British-owned companies, with a total of nearly 100,000 jobs in. The economic importance of British investments to key American states like California is reflected in the fact that employment by British-owned affiliates supported just 29,100 fewer jobs in California than the number of jobs generated by the operations of foreign-owned affiliates from all the Asia- Pacific nations combined in California. New York, Texas, Illinois, and Pennsylvania rounded out the top five states in the number of workers employed by British-owned subsidiaries, with 77,500 jobs, 71,400 jobs, 54,000 jobs, and 47,700 jobs, respectively, in. British-owned firms employed more than 30,000 workers in six additional states: Florida (41,300 jobs); New Jersey (41,200 jobs); Ohio (38,000 jobs); North Carolina (33,100 jobs); Indiana (32,400 jobs); and Massachusetts (30,000 jobs) in. British-owned firms also represented a significant percentage of all jobs related to foreign-owned firms in the District of Columbia (33 percent), Indiana (23 percent), Delaware (32 percent), and Utah (31 percent) in. STATE MANUFACTURING EMPLOYMENT BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES Indiana ranked first in the nation in the number of manufacturing jobs supported by British-owned companies, with a total of 21,100 jobs in, second only to the 26,700 jobs in Indiana supported by Japanese-owned companies operating in the state. California, Pennsylvania, Texas, and North Carolina completed the list of the top five states in the number of manufacturing jobs supported by U.S. subsidiaries of British-owned firms in. Other states with significant numbers of manufacturing jobs supported by British subsidiaries in were Ohio (11,200 jobs), Illinois (10,900 jobs), New York (7,100), New Jersey (6,500 jobs), and Georgia (6,400 jobs). These top 10 states accounted for nearly 60 percent of the manufacturing jobs across the United States supported by subsidiaries of British-owned firms in. TOP STATES IN EMPLOYMENT SUPPORTED BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES Employment TOTAL 907, California 99, New York 77, Texas 71, Illinois 54, Pennsylvania 47,700 TOP STATES IN MANUFACTURING EMPLOYMENT SUPPORTED BY U.S. AFFILIATES OF BRITISH- OWNED COMPANIES Employment TOTAL 211, Indiana 21, California 19, Pennsylvania 14, Texas 13, North Carolina 11,900 12

15 STATE KEY FINDINGS Manufacturing jobs supported by British-owned subsidiaries in West Virginia represented more than 75 percent of all jobs generated by British-owned affiliates in the state in. Manufacturing employment in New Hampshire and Indiana comprised approximately two of every three jobs supported by British-owned affiliates operating in these two states. STATE CAPITAL STOCK INVESTMENT BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES Texas ranked first nationwide in capital stock investment by British-owned subsidiaries, with investment totaling $18.5 billion in property, plant, and equipment in the state in. California ($16.3 billion), New York ($14.1 billion), Indiana ($9.8 billion), and Illinois ($7.6 billion) completed the list of the top five states in capital stock investment by U.S. subsidiaries of British-owned companies in. These five states accounted for nearly one-third of all capital stock investment by U.S. subsidiaries of British-owned companies in property, plant, and equipment in. STATE REAL ESTATE INVESTMENT BY U.S. SUBSIDIARIES OF BRITISH-OWNED COMPANIES California ranked first nationwide in real estate investment made by Britishowned subsidiaries at $3.2 billion, ahead of the $2.2 billion in real estate investment made by German-owned subsidiaries, but behind the $5.6 billion in real estate investment made by Japanese-owned subsidiaries in the state in. New York ($2.0 billion), Florida ($1.2 billion), Texas ($682 million), and Illinois ($518 million) rounded out the list of the top five states in real estate investment by subsidiaries of British-owned companies in. TOP STATES IN CAPITAL STOCK INVESTMENT* BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES Capital Stock Investment TOTAL $207.5 B 1. Texas $18.5 B 2. California $16.3 B 3. New York $14.1 B 4. Indiana $9.8 B 5. Illinois $7.6 B * Capital stock represents fixed tangible assets (gross property, plant, and equipment). TOP STATES IN REAL ESTATE INVESTMENT BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES Real Estate Investment TOTAL $12.8 B 1. California $3.2 B 2. New York $2.0 B 3. Florida $1.2 B 4. Texas $0.7 B 5. Illinois $0.5 B STATE MERCHANDISE EXPORTS TO THE UNITED KINDGOM New York ranked first nationwide in exports to the at $6 billion in. This is well behind the $13.2 billion in merchandise exported from New York to Canada, but ahead of exports from New York to all other countries in. California ($5.2 billion), Texas ($3.3 billion), New Jersey ($2.5 billion), and Utah ($2.4 billion) completed the list of the top five states by exports to the in. Massachusetts, Illinois, Washington, Indiana, Ohio, Pennsylvania, Georgia, Florida, and Virginia all sold more than $1 billion in merchandise exports to the in. TOP STATES IN U.S. MERCHANDISE EXPORTS TO THE UNITED KINGDOM Exports TOTAL $50.3 B 1. New York $6.1 B 2. California $5.2 B 3. Texas $3.3 B 4. New Jersey $2.5 B 5. Utah $2.4 B 13

16 T O P S T A T E S EMPLOYMENT BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES THE TOP 15 STATES TOP 15 STATES IN EMPLOYMENT BY U.S. AFFILIATES OF BRITISH- OWNED COMPANIES Top 15 States in U.S. Affiliates of British- Owned Companies EMPLOYMENT CONCENTRATION BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES THE TOP 15 STATES Top 15 States in Employment Concentration by U.S. Affiliates of British-Owned Companies as a Percent of All U.S. Subsidiaries of Foreign-Owned Companies Employment 1. California 99, New York 77, Texas 71, Illinois 54, Pennsylvania 47, Florida 41, New Jersey 41, Ohio 38, North Carolina 33, Indiana 32, Massachusetts 30, Georgia 24, Michigan 20, Maryland 19, Minnesota 19,100 TOP 15 STATES IN EMPLOYMENT CONCENTRATION BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES Employment Concentration 1. Wyoming 38.5% 2. District of Columbia 33.3% 3. Delaware 31.6% 4. Utah 30.6% 5. Alaska 24.8% 6. Illinois 23.9% 7. Indiana 23.2% 8. Minnesota 22.3% 9. Nevada 22.3% 10. New Mexico 21.3% 11. New Hampshire 21.1% 12. Texas 20.7% 13. New York 20.5% 14. Pennsylvania 20.5% 15. West Virginia 20.2% Data are rounded. Note: Employment statistics represent data for majority-owned affiliates. Source: U.S. Bureau of Economic Analysis 14

17 T O P S T A T E S CAPITAL STOCK INVESTMENT BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES* THE TOP 15 STATES TOP 15 STATES IN CAPITAL STOCK INVESTMENT BY U.S. AFFILIATES OF BRITISH-OWNED COMPANIES Top 15 States in Capital Stock Investment by U.S. Affiliates of British- Owned Companies Capital Stock Investment 1. Texas $18,462 M 2. California $16,272 M 3. New York $14,093 M 4. Indiana $9,802 M 5. Illinois $7,600 M 6. Massachusetts $7,266 M 7. Wyoming $7,080 M 8. Ohio $6,398 M 9. Pennsylvania $6,115 M 10. North Carolina $5,305 M 11. Florida $4,027 M 12. New Jersey $3,862 M 13. Colorado $3,847 M 14. Washington $3,027 M 15. Louisiana $2,782 M U.S. MERCHANDISE EXPORTS TO THE UNITED KINGDOM THE TOP 15 STATES Top 15 States by U.S. Merchandise Exports to the TOP 15 STATES BY U.S. MERCHANDISE EXPORTS TO THE UNITED KINGDOM Exports to U.K. 1. New York $6,081 M 2. California $5,217 M 3. Texas $3,274 M 4. New Jersey $2,526 M 5. Utah $2,382 M 6. Massachusetts $2,307 M 7. Illinois $2,225 M 8. Washington $1,911 M 9. Indiana $1,900 M 10. Ohio $1,425 M 11. Pennsylvania $1,347 M 12. Georgia $1,247 M 13. Florida $1,195 M 14. Virginia $1,099 M 15. Kentucky $977 M Note: Capital stock statistics represent data for majority-owned affiliates. 15

18 B R I T I S H B U S I N E S S I N T H E U N I T E D S T A T E S Total jobs 907,800 Manufacturing jobs 211,300 $207.5 B $12.8 B 18 percent of the 5.1 million jobs created by foreign-owned affiliates in the United States United States Export Destinations (In Billions of U.S. Dollars) 4% of the United States sold to the United Kingdom From the United States to the Total Exports to the = $50.3 B Primary metals $7.1 B $6.5 B $5.5 B $5.0 B $9.0 B 16

19 B R I T I S H B U S I N E S S I N A L A B A M A Total jobs 7,500 Manufacturing jobs 2,300 29th $2.1 B $60 M 20th 12 percent of the 63,200 jobs created by foreign-owned affiliates in Alabama Alabama s Export Destinations 5% of Alabama s From Alabama to the Total Exports to the = $732.7 M Fabricated metal products Paper products Mining $56 M $33 M $31 M $144 M $338 M Alabama and Kentucky are both tied at 29th for jobs by British-owned affiliates. 17

20 B R I T I S H B U S I N E S S I N A L A S K A Total jobs 3,000 Manufacturing jobs 0 42nd n/a n/a n/a 25 percent of the 12,100 jobs created by foreign-owned affiliates in Alaska Alaska s Export Destinations 1% of Alaska s From Alaska to the Total Exports to the = $27.7 M Fishing, hunting, & trapping Non-metallic minerals $4.1 M $1.3 M $0.4 M $7.0 M $14.2 M 18

21 B R I T I S H B U S I N E S S I N A R I Z O N A Total jobs 12,300 Manufacturing jobs 1,900 24th $1.3 B $67 M 26th 19 percent of the 64,400 jobs created by foreign-owned affiliates in Arizona Arizona s Export Destinations 5% of Arizona s From Arizona to the Total Exports to the = $959.1 M Mining Fabricated metal products $44 M $44 M $166 M $306 M $303 M 19

22 B R I T I S H B U S I N E S S I N A R K A N S A S Total jobs 4,900 Manufacturing jobs 2,800 35th $408 M $10 M 39th 14 percent of the 33,900 jobs created by foreign-owned affiliates in Arkansas Arkansas s Export Destinations 4% of Arkansas s From Arkansas to the Total Exports to the = $191.9 M Processed foods Fabricated metal products $30 M $26 M $15 M $14 M $78 M 20

23 B R I T I S H B U S I N E S S I N C A L I F O R N I A Total jobs 99,300 Manufacturing jobs 19,300 1st $16.3 B $3.2 B 2nd 18 percent of the 542,600 jobs created by foreign-owned affiliates in California California s Export Destinations (In Billions of U.S. Dollars) 4% of California s From California to the Total Exports to the = $5.2 B Beverage & tobacco products $612 M $460 M $416 M $262 M $1,807 M 21

24 B R I T I S H B U S I N E S S I N C O L O R A D O Total jobs 12,700 Manufacturing jobs 2,400 23rd $3.8 B $130 M 13th 18 percent of the 72,200 jobs created by foreign-owned affiliates in Colorado Colorado s Export Destinations 3% of Colorado s From Colorado to the Total Exports to the = $253.7 M Mining $36 M $28 M $22 M $9 M $93 M 22

25 B R I T I S H B U S I N E S S I N C O N N E C T I C U T Total jobs 15,300 Manufacturing jobs 3,300 19th $1.6 B $211 M 22nd 15 percent of the 100,900 jobs created by foreign-owned affiliates in Connecticut Connecticut s Export Destinations 6% of Connecticut s From Connecticut to the Total Exports to the = $854.7 M Fabricated metal products $136 M $133 M $57 M $26 M $354 M 23

26 B R I T I S H B U S I N E S S I N D E L A W A R E Total jobs 8,600 Manufacturing jobs 1,000 27th $1.5 B $59 M 24th 32 percent of the 27,200 jobs created by foreign-owned affiliates in Delaware Delaware s Export Destinations 21% of Delaware s From Delaware to the Total Exports to the = $856.1 M Primary metals $34 M $15 M $10 M $10 M $779 M 24

27 BRITISH BUSINESS IN THE DISTRICT OF COLUMBIA Total jobs 5,200 Manufacturing jobs n/a 34th $224 M $109 M 41st 33 percent of the 15,600 jobs created by foreign-owned affiliates in the District of Columbia District of Columbia s Export Destinations 33% of the District Columbia s sold to the United Kingdom From the District of Columbia to the Total Exports to the = $358.8 M Fabricated metal products Used merchandise Printing & related products $31 M $9 M $4 M $73 M $199 M 25

28 B R I T I S H B U S I N E S S I N F L O R I D A Total jobs 41,300 Manufacturing jobs 3,400 6th $4.0 B $1.2 B 11th 18 percent of the 226,000 jobs created by foreign-owned affiliates in Florida Florida s Export Destinations 3% of Florida s From Florida to the Total Exports to the = $1.2 B Used merchandise $92 M $74 M $138 M $223 M $278 M 26

29 B R I T I S H B U S I N E S S I N G E O R G I A Total jobs 24,100 Manufacturing jobs 6,400 12th $2.3 B $483 M 18th 14 percent of the 170,300 jobs created by foreign-owned affiliates in Georgia Georgia s Export Destinations 5% of Georgia s From Georgia to the Total Exports to the = $1.2 B Paper products $196 M $142 M $121 M $74 M $306 M 27

30 B R I T I S H B U S I N E S S I N H A W A I I Total jobs 1,400 Manufacturing jobs n/a 47th $34 M $19 M 46th 5 percent of the 30,300 jobs created by foreignowned affiliates in Hawaii Hawaii s Export Destinations 3% of Hawaii s From Hawaii to the Total Exports to the = $16.5 M Used merchandise Animal production $0.7 M $0.2 M $0.2 M $0.1 M $13.0 M 28

31 B R I T I S H B U S I N E S S I N I D A H O Total jobs 2,300 Manufacturing jobs th $744 M $25 M 34th 19 percent of the 12,200 jobs created by foreign-owned affiliates in Idaho Idaho s Export Destinations 4% of Idaho s United Kingdom From Idaho to the Total Exports to the = $171.2 M Primary metals Fabricated metal products $5 M $2 M $2 M $22 M $123 M 29

32 B R I T I S H B U S I N E S S I N I L L I N O I S Total jobs 54,000 Manufacturing jobs 10,900 4th $7.6 B $518 M 5th 24 percent of the 226,400 jobs created by foreign-owned affiliates in Illinois Illinois s Export Destinations 5% of Illinois s From Illinois to the Total Exports to the = $2.2 B Fabricated metal products $223 M $198 M $393 M $367 M $621 M 30

33 B R I T I S H B U S I N E S S I N I N D I A N A Total jobs 32,400 Manufacturing jobs 21,100 10th $9.8 B $108 M 4th 23 percent of the 139,900 jobs created by foreign-owned affiliates in Indiana Indiana s Export Destinations (In Billions of U.S. Dollars) 7% of Indiana s From Indiana to the Total Exports to the = $1.9 B Printing & related products $266 M $222 M $60 M $58 M $837 M 31

34 B R I T I S H B U S I N E S S I N I O W A Total jobs 4,500 Manufacturing jobs 1,000 37th $615 M $47 M 37th 12 percent of the 37,300 jobs created by foreign-owned affiliates in Iowa Iowa s Export Destinations 3% of Iowa s United Kingdom From Iowa to the Total Exports to the = $268.1 M Primary metals Electrical equipment, appliances, & parts $18 M $16 M $29 M $48 M $86 M 32

35 B R I T I S H B U S I N E S S I N K A N S A S Total jobs 5,800 Manufacturing jobs 1,800 33rd $1.2 B $28 M 28th 18 percent of the 32,900 jobs created by foreign-owned affiliates in Kansas Kansas s Export Destinations 6% of Kansas s From Kansas to the Total Exports to the = $593.1 M Plastic & rubber products $95 M $48 M $41 M $20 M $350 M 33

36 B R I T I S H B U S I N E S S I N K E N T U C K Y Total jobs 7,500 Manufacturing jobs 3,000 29th $950 M $51 M 33rd 9 percent of the 86,000 jobs created by foreign-owned affiliates in Kentucky Kentucky s Export Destinations 5% of Kentucky s From Kentucky to the Total Exports to the = $1.0 B Animal production Beverage & tobacco products $98 M $83 M $33 M $24 M $601 M Alabama and Kentucky are both tied at 29th for jobs by British-owned affiliates. 34

37 B R I T I S H B U S I N E S S I N L O U I S I A N A Total jobs 7,600 Manufacturing jobs 1,000 28th $2.8 B $16 M 15th 15 percent of the 52,300 jobs created by foreign-owned affiliates in Louisiana Louisiana s Export Destinations 1% of Louisiana s From Louisiana to the Total Exports to the = $348.6 M Mining $27 M $25 M $24 M $53 M $94 M 35

38 B R I T I S H B U S I N E S S I N M A I N E Total jobs 1,800 Manufacturing jobs th $161 M $16 M 42nd 8 percent of the 23,700 jobs created by foreignowned affiliates in Maine Maine s Export Destinations 2% of Maine s United Kingdom From Maine to the Total Exports to the = $56.9 M Wood products Paper products $10.0 M $4.6 M $3.2 M $2.7 M $21.1 M 36

39 B R I T I S H B U S I N E S S I N M A R Y L A N D Total jobs 19,700 Manufacturing jobs 3,900 14th $1.5 B $232 M 25th 19 percent of the 102,700 jobs created by foreign-owned affiliates in Maryland Maryland s Export Destinations 5% of Maryland s From Maryland to the Total Exports to the = $469.5 M Printing & related products $46 M $42 M $57 M $80 M $94 M 37

40 B R I T I S H B U S I N E S S I N M A S S A C H U S E T T S Total jobs 30,000 Manufacturing jobs 5,800 11th $7.3 B $473 M 6th 18 percent of the 167,500 jobs created by foreign-owned affiliates in Massachusetts Massachusetts s Export Destinations (In Billions of U.S. Dollars) 9% of Massachusetts s sold to the United Kingdom From Massachusetts to the Total Exports to the = $2.3 B Primary metals Plastic & rubber products $87 M $66 M $365 M $687 M $664 M 38

41 B R I T I S H B U S I N E S S I N M I C H I G A N Total jobs 20,600 Manufacturing jobs 6,100 13th $1.7 B $77 M 21st 10 percent of the 202,300 jobs created by foreign-owned affiliates in Michigan Michigan s Export Destinations 2% of Michigan s From Michigan to the Total Exports to the = $742.6 M Fabricated metal products $38 M $75 M $129 M $170 M $185 M 39

42 B R I T I S H B U S I N E S S I N M I N N E S O T A Total jobs 19,100 Manufacturing jobs 3,400 15th $1.2 B $111 M 29th 22 percent of the 85,600 jobs created by foreign-owned affiliates in Minnesota Minnesota s Export Destinations 4% of Minnesota s From Minnesota to the Total Exports to the = $739.9 M Electrical equipment, appliances, & parts $44 M $74 M $97 M $124 M $190 M 40

43 B R I T I S H B U S I N E S S I N M I S S I S S I P P I Total jobs 4,200 Manufacturing jobs 1,200 39th $1.0 B $19 M 32nd 17 percent of the 25,200 jobs created by foreign-owned affiliates in Mississippi Mississippi s Export Destinations 4% of Mississippi s From Mississippi to the Total Exports to the = $188.8 M Paper products $21 M $19 M $17 M $10 M $79 M 41

44 B R I T I S H B U S I N E S S I N M I S S O U R I Total jobs 15,500 Manufacturing jobs 5,300 18th $1.6 B $36 M 23rd 18 percent of the 85,100 jobs created by foreign-owned affiliates in Missouri Missouri s Export Destinations 3% of Missouri s From Missouri to the Total Exports to the = $345.4 M Fabricated metal products Printing & related products $32 M $39 M $52 M $58 M $64 M 42

45 B R I T I S H B U S I N E S S I N M O N T A N A Total jobs 1,100 Manufacturing jobs th $628 M $1 M 35th 16 percent of the 6,700 jobs created by foreign-owned affiliates in Montana Montana s Export Destinations 3% of Montana s From Montana to the Total Exports to the = $30.1 M Fabricated metal products $6.7 M $1.3 M $0.9 M $0.8 M $18.2 M 43