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Did you know that . . . The Benefits of Affiliates of Foreign Multinationals in the U.S.By Harry Freeman
Oct 11, 2002

3.6 percent of U.S. GDP comes from foreign services companies operating in the United States, compared to 3.4 percent for the foreign affiliates of manufacturing, agriculture, and mining companies combined!

The Commerce Department recently issued some interesting data* that show that foreign companies in the services sector operating in the United States contribute billions of dollars of benefits to the U.S. economy and thousands of jobs to the U.S. employment rolls.

According to the Bureau of Economic Analysis of the Commerce Department, the GDP contributed by U.S. affiliates of foreign companies (10 percent or more foreign ownership) totaled $522 billion in 2000 (the latest year for which such data are available) -- 7.0 percent of U.S. GDP -- and 6.4 million employees. Of this, services affiliates represented $272 billion in GDP and 3.7million workers.

Thus, in 2000, services-sector affiliates in the United States accounted for more than half 52 percent -- of the value added of all non-bank affiliates, compared to 45 percent for manufacturing-sector affiliates (the balance represents affiliates in agriculture and mining). Affiliates active in wholesale trade represent the largest of services sector GDP.

In short, while manufacturing is clearly important and the operations of manufacturing sector foreign affiliates tend to receive the most attention in the media and from policy makers, in fact services-sector affiliates contribute importantly to the U.S. economy as well.

* See William J. Zeile, U.S. Affiliates of Foreign Companies: Operations in 2000, Survey of Current Business, August 2002, pp. 149-166.

The Mark Twain Institute, a Washington think tank dedicated to work on economic statistics.

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