Investment stock can be a more accurate and less volatile indicator of inward investment than flow, but the UK’s Office of National Statistics reported last month that the UK attracted £32bn in the inward investment in the first quarter of 2011 – it’s strongest quarter for over 3 years, and a huge leap from the £5.1bn in the previous quarter.
And on Monday, UK Trade and Investment, the British Government’s trade and investment promotion body, published its report card for 2010/11. Beyond the headline that 54 countries invested in the UK last year creating or safeguarding over 94,000 jobs, was the reminder of the essential importance of the US to the UK’s economy – the US produced 388, or 27%, of the total 1,434 inward investment projects. That’s more than the next four largest investors combined – Japan, India, Germany and France. US companies General Electric and HP, in their press releases, praised the UK’s technology expertise, knowledge and innovation, and the deep pool of highly skilled people. Cisco, General Motors, Google, Time Warner, and JP Morgan were some of the well known brands that have committed to new investments in the UK since 2010.
The World Bank has marked the UK as the 4th easiest place in the world to do business, and first in Europe. We’re pleased that US investors think so too. US inward investment is an essential part of our economic recovery. But it’s not a one-way street. The Department of Commerce’s Bureau of Economic Analysis updated their 2010 investment stock and flow data last month, confirming that the US and the UK remain each other’s single largest investors. UK investors employ almost a million people across each of the US’ 50 states. Last year, aerospace major Rolls Royce opened a new facility in Virginia, Manchester Business School set up an education operation in Miami, Lloyds of London opened a new Office in Atlanta and Blade Dynamics opened a wind turbine manufacturing plant in Louisiana. Firth Rixon, producing highly engineered forged and speciality metal products, is constructing a 200,000 square foot closed die forging operation in Liberty County, Georgia, creating a further 200 US jobs.
Here’s some of the headline figures of the UK-US investment relationship:
- US investment stock in UK stands at $508.4bn, that’s over 8 times the level of US investment stock in China:
- UK investment stock in US stands at $432.5bn, nearly 140 times the level of Chinese investment in the US;
- UK Investment stock in the US is nearly double that of the next highest investor, the Netherlands;
- UK investment flows into the US were $37.0bn – nearly double 2009’s $20.4bn.
As Prime Minister Cameron and President Obama coined it in May, ours is a special and essential relationship.