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Ray Mataloni: (202) 606-9867 BEA 07-15
Summary Estimates for Multinational Companies:
Employment, Sales, and Capital Expenditures for 2005
U.S. multinational companies (MNCs) employed 30.5 million workers
worldwide in 2005, of which 21.5 million were employed in the United
States by U.S. parent companies and 9.1 million were employed abroad
by their majority-owned foreign affiliates. The employment in the
United States by U.S. parents accounted for almost one-fifth of total
U.S. employment in private industries. Worldwide capital expenditures
by U.S. MNCs totaled $478.1 billion; capital expenditures in the United
States by U.S. parents accounted for $340.8 billion and capital
expenditures abroad by majority-owned foreign affiliates accounted
for $137.3 billion. Sales by U.S. parent companies totaled $7,606.1
billion, and those by majority-owned foreign affiliates totaled
$3,761.9 billion.
Majority-owned U.S. affiliates of foreign MNCs employed 5.1 million
workers in 2005, accounting for 4.5 percent of total U.S. employment
in private industries. Capital expenditures by these affiliates
totaled $120.9 billion and their sales totaled $2,507.6 billion.
Worldwide employment by U.S. MNCs increased 1.8 percent in 2005,
following a 2.2-percent increase in 2004. Employment in the United
States by U.S. parent companies increased 1.1 percent, following a
0.6-percent increase. Employment abroad by the majority-owned
foreign affiliates of U.S. MNCs increased 3.6 percent, following a
6.1-percent increase. Employment in the United States by
majority-owned U.S. affiliates of foreign MNCs decreased 0.7 percent
in 2005, following a 2.0-percent decrease in 2004.
Worldwide capital expenditures of U.S. MNCs increased 15.2 percent in
2005, following a decrease of 2.4 percent in 2004. The increase
reflected a 15.3-percent increase in capital spending in the United
States by U.S. parent companies, following a decrease of 6.3 percent;
capital spending abroad by majority-owned foreign affiliates increased
14.9 percent, following a 9.0-percent increase. For majority-owned U.S.
affiliates of foreign MNCs, capital expenditures increased 7.1 percent
in 2005, following a 3.5-percent increase in 2004.
Sales by U.S. parent companies increased 8.7 percent, following a
6.9-percent increase in 2004, and sales by majority-owned foreign
affiliates increased 14.4 percent, following a 14.8-percent increase.
Sales by majority-owned U.S. affiliates of foreign MNCs increased 8.8
percent, following an increase of 8.6 percent.
Employment in the United States by U.S. parent companies accounted for
70 percent of the worldwide employment of U.S. MNCs in 2005, down from
71 percent in 2004. The U.S.-parent share of the worldwide capital
expenditures of U.S. MNCs in 2005 was 71 percent, the same share as
in 2004.
The U.S.-parent share of MNC activity can change for a number of
reasons, and the changes do not uniformly correspond to either
additions to, or subtractions from, employment and capital expenditures
in the United States. Examples of factors other than production
shifting that might be associated with a change in the parent and
affiliate shares of MNC activity include different rates of economic
growth in the United States and in specific markets where investment
is occurring abroad, or the creation of new market opportunities
abroad that cannot be served by exports from the United States.
Additional discussion of data and analytical considerations may be
found in A Note on Patterns of Production and Employment by U.S.
Multinational Companies, in the March 2004 issue of the Survey of
Current Business.
Revisions.--The MNC estimates for 2004 presented in this release
supercede preliminary estimates that were released in the
second half of 2006. For U.S. parent companies, the estimates of
employment were revised down 0.6 percent, the estimates of capital
expenditures were revised down 4.3 percent, and the estimates of
sales were revised up 0.7 percent. For majority-owned foreign
affiliates, the estimates of employment were revised up 1.5 percent,
the estimates of capital expenditures were revised down 2.9 percent,
and the estimates of sales were revised up 1.5 percent. For
majority-owned U.S. affiliates of foreign MNCs, the estimates of
employment were revised up 0.5 percent, the estimates of capital
expenditures were revised up 4.4 percent, and the estimates of sales
were revised up 0.1 percent. The upward revision for capital
expenditures by majority-owned U.S. affiliates was largely due to late
reports for newly acquired affiliates, including companies in
automotive equipment rental and leasing (see definition of capital
expenditures in the technical note).
* * *
TECHNICAL NOTE
For the fourth consecutive year, the Bureau of Economic Analysis is
releasing advance summary estimates of employment, sales, and capital
expenditures by U.S. parent companies, by their foreign affiliates,
and by U.S. affiliates of foreign MNCs. Estimates based on more
complete source data, including country and industry detail, will be
released later this year.
The estimates presented in this release were constructed from data
collected by BEA in two distinct surveys of MNC operations: (1) a
survey of U.S. MNCs that covers the operations of both U.S. parent
companies and their foreign affiliates, and (2) a survey of the
operations of U.S. affiliates of foreign MNCs. Because a U.S. parent
company may itself be foreign-owned, there is some overlap between the
data on U.S. parent companies and on U.S. affiliates; thus, to avoid
duplication, data on U.S. parents and U.S. affiliates should not be
added together to produce U.S. totals.
The estimates presented here pertain to nonbank U.S. parent companies
and their majority-owned nonbank foreign affiliates, and to
majority-owned nonbank U.S. affiliates of foreign MNCs. Data on all
nonbank U.S. and foreign affiliates, including affiliates that are not
majority-owned, will be presented in the Survey of Current Business
later this year. (In these data series, affiliates are defined as
businesses in which an investor of another country holds at least
10-percent ownership.)
The most recent data show that nonbank foreign affiliates that were not
majority-owned employed 1.4 million workers, and nonbank U.S.
affiliates that were not majority-owned employed 0.4 million workers,
in 2004. Data on bank parents and affiliates are currently collected
only in benchmark surveys, which are conducted once every five years.
To close this gap in coverage, BEA is proposing to extend the coverage
of its annual surveys of MNC operations to include banks, with an
annual time series of data beginning for 2007.
Based on data from the 1999 Benchmark Survey of U.S. Direct Investment
Abroad (the 2004 benchmark covered banks, but the results released to
date have covered only nonbanks), U.S. bank parents employed 1.0
million workers, and foreign affiliates of U.S. bank parents, plus bank
affiliates of U.S. nonbank parents, together employed 0.2 million
workers. (Data for U.S. parents and foreign affiliates in banking will
be included in the presentation of final results from the 2004
benchmark survey.) The most recent data on U.S. affiliates in banking
cover the benchmark-survey year 2002: These data show that U.S.
affiliates that were banks employed 0.1 million workers in 2002. For
both U.S. bank affiliates of foreign companies and foreign bank
affiliates of U.S. companies, almost all of the employment was by
majority-owned affiliates.
For both U.S. MNCs and U.S. affiliates of foreign MNCs, the estimates
of employment cover the total number of full-time and part-time
employees on the payroll at the end of the year. The estimates of
sales cover gross sales minus returns, allowances and discounts, or
gross operating revenues. The estimates of capital expenditures cover
total expenditures on property, plant, and equipment (that is,
expenditures for land and depreciable structures and equipment); they
are gross of any sales, retirements, or transfers of previously owned
tangible assets. Capital expenditures include spending for equipment
that is leased or rented to others, which in some industriessuch as
automotive equipment rental and leasingcan be very large (the value
of sales, retirements, or transfers in these industries also can be
very large).
In addition to presenting data collected directly in its surveys of MNC
operations, BEA uses data collected on costs incurred and profits
earned in production to estimate the value added of U.S. parent
companies, of majority-owned foreign affiliates, and of majority-owned
U.S. affiliates of foreign companies. Value added estimates indicate
the contribution of parents or affiliates to gross domestic product
in the United States or in foreign host countries. The latest
estimates of the value added of U.S. parent companies and
majority-owned foreign affiliates, which cover the year 2004, are
presented in "Operations of U.S. Multinational Companies: Preliminary
Results from the 2004 Benchmark Survey," in the November 2006 issue of
the Survey of Current Business. The latest estimates of the value
added of majority-owned U.S. affiliates of foreign companies, which
also cover 2004, are presented in "U.S. Affiliates of Foreign Companies:
Operations in 2004," in the August 2006 issue of the Survey.
* * *
Summary BEA estimates are available on recorded messages at the
time of public release at the following telephone numbers
(202) 606-5306 Gross domestic product
(202) 606-5303 Personal income and outlays
BEA's national, regional, international, and industry estimates,
the Survey of Current Business, and BEA news releases are available
on BEA's Web site at www.bea.gov. By visiting the site, you can also
subscribe to receive free e-mail summaries of BEA releases and
announcements.
* * *
Table 1. Employment, Capital Expenditures, and Sales by Nonbank U.S. Multinational Companies, 1988-2005
Thousands of employees Millions of dollars
U.S. U.S. Majority- Capital expenditures/1/ Sales/2/
multinationa parents owned U.S. U.S. Majority- U.S. Majority-
companies foreign multinationa parents owned parents owned
affiliates companies foreign foreign
affiliates affiliates
1988 ................ 22,498.1 17,737.6 4,760.5 223,814 177,203 46,611 2,828,209 927,886
1989 ................ 23,879.4 18,765.4 5,114.0 260,488 201,808 58,680 3,136,837 1,019,966
1990 ................ 23,785.7 18,429.7 5,356.0 274,614 213,079 61,535 3,243,721 1,208,349
1991 ................ 23,345.4 17,958.9 5,386.5 269,221 206,290 62,931 3,252,534 1,242,635
1992 ................ 22,812.0 17,529.6 5,282.4 272,049 208,834 63,215 3,330,886 1,291,649
1993 ................ 22,760.2 17,536.9 5,223.3 271,661 207,437 64,224 3,480,778 1,275,775
1994 ................ 24,272.5 18,565.4 5,707.1 303,364 231,917 71,447 3,990,013 1,435,901
1995 ................ 24,499.7 18,576.2 5,923.5 323,616 248,017 75,599 4,235,578 1,693,836
1996 ................ 24,867.0 18,790.0 6,077.0 340,510 260,048 80,462 4,478,970 1,868,588
1997 ................ 26,358.0 19,878.0 6,480.0 398,037 309,247 88,790 4,886,330 1,972,515
1998 ................ 26,592.9 19,819.8 6,773.1 411,155 317,184 93,971 4,970,138 1,971,909
1999/3/ ............. 30,772.6 23,006.8 7,765.8 483,032 369,728 113,304 5,975,478 2,218,945
2000 ................ 32,056.6 23,885.2 8,171.4 506,950 396,313 110,637 6,695,166 2,507,433
2001 ................ 30,929.2 22,735.1 8,194.1 524,215 413,457 110,758 6,800,777 2,524,459
2002 ................ 30,373.2 22,117.6 8,255.6 443,388 333,113 110,275 6,337,779 2,515,641
2003 ................ 29,347.0 21,104.8 8,242.2 425,068 315,480 109,588 6,543,937 2,865,226
2004/4/ ............. 29,987.8 21,241.0 8,746.8 415,038 295,565 119,473 6,998,298 3,288,364
2005/5/ ............. 30,536.7 21,479.0 9,057.7 478,077 340,761 137,316 7,606,129 3,761,864
Percent change at
annual rates:
1988-2002 ........... 2.2 1.6 4.0 5.0 4.6 6.3 5.9 7.4
2002-2003 ........... -3.4 -4.6 -0.2 -4.1 -5.3 -0.6 3.3 13.9
2003-2004 ........... 2.2 0.6 6.1 -2.4 -6.3 9.0 6.9 14.8
2004-2005 ........... 1.8 1.1 3.6 15.2 15.3 14.9 8.7 14.4
1. Total expenditures for property, plant, and equipment.
2. An MNC-wide total for sales is not provided because transactions among and within MNCs would be duplicated.
3. Break-in-series. (See the technical note on page 121 of the December 2002 issue of the Survey of Current Business for details.)
4. These estimates update those published in the November 2006 issue of the Survey of Current Business. (Those estimates, in turn,
updated the advance summary estimates released on April 20, 2006.) Revised estimates based on more complete source data
will be released later this year.
5. Advance estimates. Preliminary estimates based on more complete source data will be released later this year.
NOTE: The data presented in this table cover nonbank U.S. MNCs only. Bank parents and affiliates are not required
to report in BEA's annual surveys of the operations of U.S. MNCs. Some limited data on the operations of
bank parents and affiliates (including employment and sales) are reported in benchmark surveys of U.S. direct investment
abroad conducted by BEA every five years. (See the Technical Note.)
* * *
Table 2. U.S.-Parent Share of Selected Measures of the Operations
of Nonbank U.S. Multinational Companies
[Percent]
Employment Capital
expenditures
1988 ............ 78.8 79.2
1989 ............ 78.6 77.5
1990 ............ 77.5 77.6
1991 ............ 76.9 76.6
1992 ............ 76.8 76.8
1993 ............ 77.1 76.4
1994 ............ 76.5 76.4
1995 ............ 75.8 76.6
1996 ............ 75.6 76.4
1997 ............ 75.4 77.7
1998 ............ 74.5 77.1
1999 ............ 74.8 76.5
2000 ............ 74.5 78.2
2001 ............ 73.5 78.9
2002 ............ 72.8 75.1
2003 ............ 71.9 74.2
2004/1/ ......... 70.8 71.2
2005/2/ ......... 70.3 71.3
1. These estimates update those published in the
November 2006 issue of the Survey of Current Business.
(Those estimates, in turn, updated the advance summary estimates
released on April 20, 2006.) Revised estimates
based on more complete source data will be
released later this year.
2. Advance estimates. Preliminary estimates based
on more complete source data will be released
later this year.
NOTE: A U.S.-parent share for sales is not provided because an
MNC-wide total for sales would contain duplication resulting from
transactions among and within MNCs.
* * *
Table 3. Employment, Capital Expenditures, and Sales by Majority-Owned
Nonbank U.S. Affiliates of Foreign Companies, 1988-2005
Thousands Millions of dollars
of Capital Sales
employees Expenditures/1/
1988 ....................... 3,119.0 42,355 739,128
1989 ....................... 3,573.4 51,490 863,538
1990 ....................... 3,841.7 61,812 995,013
1991 ....................... 3,991.3 60,097 1,008,388
1992 ....................... 3,903.9 52,787 1,049,942
1993 ....................... 3,851.7 53,371 1,112,693
1994 ....................... 3,954.0 60,317 1,210,837
1995 ....................... 4,022.6 64,778 1,311,210
1996 ....................... 4,155.6 77,890 1,423,715
1997 ....................... 4,269.1 88,313 1,478,221
1998 ....................... 4,669.5 109,365 1,622,946
1999 ....................... 5,064.3 114,767 1,792,520
2000 ....................... 5,656.5 112,986 2,051,878
2001 ....................... 5,594.3 121,665 2,070,234
2002 ...................... 5,425.4 111,373 2,030,962
2003 ....................... 5,244.4 109,126 2,122,683
2004 /2/ .................. 5,141.5 112,915 2,304,949
2005 /3/ ................... 5,103.2 120,883 2,507,588
Percent change at
annual rates:
1988-2002 .................. 4.0 7.1 7.5
2002-2003 .................. -3.3 -2.0 4.5
2003-2004 .................. -2.0 3.5 8.6
2004-2005 .................. -0.7 7.1 8.8
1. Total expenditures for property, plant, and equipment.
2. These estimates update those published in the August 2006 issue of the Survey of Current Business. (Those estimates, in
turn, updated the advance summary estimates released on April 20, 2006.) Revised estimates will be released later
this year.
3. Advance estimates. Preliminary estimates based on more complete source data will be released later this year.
NOTES: The data presented in this table cover nonbank affiliates only. Bank affiliates are not required to report in BEA's annual
surveys of the operations of U.S. affiliates of foreign companies. (See the Technical Note.) Some limited data on the operations of
bank affiliates (including employment and sales) are reported in benchmark surveys conducted by BEA every five years. The latest
benchmark survey results cover the year 2002.
In contrast to the presentation in Table 1 for U.S. multinational companies (which includes data for U.S. parent companies), this
table does not include data on foreign parent companies or totals for foreign multinational companies, because they are not covered
in BEA's surveys.
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