The Republic is now the fourth most popular destination for US manufacturing investment overseas, an international survey shows.
Globalisation Divided? Global Investment Trends of US manufacturers shows the Republic attracted foreign direct investment from US manufacturers worth about €2 billion in 2002.
This performance ranked the Republic behind only Canada, Britain and the Netherlands in terms of the amount of US manufacturing investment it received.
This represents an improvement on the €1.5 billion investment that Ireland attracted in 1999, which ranked it as only the ninth most important destination for manufacturing investment.
The study, which was prepared by Deloitte, indicates the emergence of a global investment divide as US manufacturers concentrate their investment in higher wage countries such as Britain and Ireland. Whereas in lower wage economies, such as Brazil, China and India, US manufacturers are now outsourcing and partnering with local firms.
US manufacturers total foreign direct investment fell by 1 per cent in 2003 to about $29 billion (€23.9 billion), representing a third consecutive year of investment declines from a high of $49 billion in 2000.
"Internationally we are seeing a dramatic slowdown in US direct manufacturing investment into low-wage locations because more companies appear to be outsourcing work to local vendors, rather than establishing plants of their own," said Mr David Hearn,head of consulting at Deloitte Ireland. "This is very encouraging for Ireland given recent concerns about competitiveness."
The survey findings show that developed markets continue to receive an increasing share of investments from US multinationals. In 2002, developed markets attracted 84 per cent of total foreign direct investment, compared to 61 per cent in 2000.
An analysis of sectors shows the US computer sector rebounded in 2003 and foreign direct investment rose to $4.6 billion.
