Foreign Direct Investment Growing in the Carolinas
Despite the fact that a strong U.S. dollar that makes investing here more expensive for many other currencies, foreign buyers have been gobbling up U.S. properties, investing more than $32 billion during the first half of 2016, according to a released recently by commercial real estate services firm Newmark Grubb Knight Frank.
But the spend is at a slower pace than last year for the Queen City. Is Charlotte capturing its fair share?
Charlotte lags in foreign investment, according to the study. More than half of the foreign investment made between January and June went to six U.S. markets: New York City (28%); San Francisco (8.3%); Chicago (6.9%); Los Angeles (5.9%); San Diego (3.9%) and Washington, D.C. (3.9%). Atlanta landed 1.3% of foreign investment while spending in Charlotte is lumped in with the 22.6% going to “other cities.”
At the same time, South Carolina has benefited more from foreign direct investment insourced jobs than any other state.
“I think there’s a bit of a nostalgia sometimes for the jobs the state used to rely on,” said University of South Carolina economics professor William Hauk, describing the state as hammered a few decades ago by losses to the textile industry. “But many haven’t noticed that lots of new jobs are benefiting the state.”
While South Carolina has suffered the loss of blue-collar jobs in recent years like the rest of the country, it has benefited more than almost any other state from foreign investment. U.S. subsidiaries of global companies are writing paychecks for 8 percent of South Carolina’s workforce in the private sector—the highest in the country—and providing 127,300 jobs according to data from the U.S. Bureau of Economic Analysis.
In the past five years, South Carolina’s employment via foreign direct investment has gone up by 13.4 percent, with over half of those jobs being in the manufacturing sector.
“I think we can absolutely go too far in being protectionist,” says University of South Carolina economics professor William Hauk, “because it’s so easy to see jobs that are lost to Mexico and China and harder to see the jobs that are gained and insourced to South Carolina through foreign companies like Volvo or Continental Tire.”
In 2014 alone, 1,233 international firms from 42 countries invested $5.1 billion in the Palmetto State. German automaker BMW announced a billion-dollar investment in its Upstate plant in March, and Volvo selected South Carolina for its first American factory last year, investing $500 million in a facility in Berkeley County that will create 2,500 jobs.
Similarly, international trade is crucial to South Carolina’s economy, supporting one in five jobs in the state in 2013.
The crucial investment by BMW in 1994 in South Carolina has resulted in over 9,000 jobs at their facility in Greer. Following them to the U.S. is their vendor/supplier network, which now numbers over 1,000 businesses choosing the Carolinas as they seek to expand their business activity in the U.S. economy.
The following is a report developed by Professor Dan Hamilton, Executive Director of the Johns Hopkins University Center for Transatlantic Relations, about the opportunities emanating from the Transatlantic Trade and Investment Partnership between the United States and the European Union under negotiation.