Foreign Investment Momentum Back in 2011

IndustryWeek (7/27, AFP) – Foreign direct investment flows should take two years to regain momentum after a sharp drop in 2009, a UN think tank said last week as it warned of the risk of economic nationalism during the recovery. The World Investment Survey 2009 found that about half of them even expected their foreign direct investment (FDI) expenditure in 2011 to rise above 2008 levels, when inflows worldwide reached an estimated $1.4 trillion -- about a fifth less than the 2007 peak. However, manufacturing industries, hard hit in recent months, are likely to lag behind in the recovery, and the corporate world also fears a bout of investment protectionism.

Fifty eight percent of the companies surveyed were reducing their investments this year. But the survey also found that companies were intent on pursuing an international approach to production, employment and investment as well as sales. The brightest outlook came from transnational companies based in the developing world, especially Asia, and in the U.S., followed by Europe and Japan.