U.S. Affiliates of Foreign Companies.

Zeile, William J.

Operations in 1998

ACCORDING to preliminary results from BEA's 1998 annual survey of foreign direct investment in the United States (FDIUS), record levels of new foreign investment helped to boost the current-dollar gross product of U.S. affiliates of foreign companies 7 percent, from $389 billion in 1997 to $418 billion in 1998.(1) Despite this increase, strong growth in the U.S. economy resulted in little change in the share of the private economy that is accounted for by U.S. affiliates: The affiliate share of gross product originating in private industries increased from 6.2 percent in 1997 to 6.3 percent in 1998 (table 1 and chart 1).

[Chart 1 OMITTED]

Table 1.--Gross Product of Nonbank U.S. Affiliates of Foreign Companies, 1977-98

 Millions of dollars

 All nonbank Majority-
 affiliates owned
 nonbank
 affiliates

1977 35,222 n.a.
1978 42,920 n.a.
1979 55,424 n.a.
1980 70,906 n.a.
1981 98,828 n.a.
1982 103,489 n.a.
1983 111,490 n.a.
1984 128,761 n.a.
1985 134,852 n.a.
1986 142,120 n.a.
1987 157,869 n.a.
1988 190,384 146,424
1989 223,420 168,547
1990 239,279 190,477
1991 257,634 207,126
1992 266,333 214,781
1993 285,738 223,008
1994 312,981 244,690
1995 322,631 254,938
1996 358,085 283,422
1997(r) 389,432 313,655
1998(p) 418,138 352,756

Percent change from
 preceding year:

1989 17.4 15.1
1990 7.1 13.0
1991 7.7 8.7
1992 3.4 3.7
1993 7.3 3.8
1994 9.5 9.7
1995 3.1 4.2
1996 11.0 11.2
1997(r) 8.8 10.7
1998(p) 7.4 12.5

 Percentage of U.S.
 private-industry gross Addendum:
 product Gross product of
 majority-owned
 All nonbank Majority- nonbank affiliates
 affiliates owned as a percentage
 nonbank of that of all
 affiliates nonbank affiliates

1977 2.3 n.a. n.a
1978 2.4 n.a. n.a
1979 2.8 n.a. n.a
1980 3.3 n.a. n.a
1981 4.2 n.a. n.a
1982 4.3 n.a. n.a
1983 4.2 n.a. n.a
1984 4.4 n.a. n.a
1985 4.3 n.a. n.a
1986 4.3 n.a. n.a
1987 4.4 n.a. n.a
1988 4.9 3.8 76.9
1989 5.4 4.1 75.4
1990 5.5 4.4 79.6
1991 5.8 4.7 80.4
1992 5.7 4.6 80.6
1993 5.8 4.5 78.0
1994 5.9 4.6 78.2
1995 5.8 4.6 79.0
1996 6.1 4.8 79.1
1997(r) 6.2 5.0 80.5
1998(p) 6.3 5.3 84.4

Percent change from
 preceding year:

1989 ... ... ...
1990 ... ... ...
1991 ... ... ...
1992 ... ... ...
1993 ... ... ...
1994 ... ... ...
1995 ... ... ...
1996 ... ... ...
1997(r) ... ... ...
1998(p) ... ... ...

(p) Preliminary.

(r) Revised.

n.a. Not available.

NOTE--For improved comparability with U.S.-affiliate gross product, U.S. private-industry gross product was adjusted to exclude gross product originating in depository institutions and private households, imputed rental income from owner occupied housing, and business transfer payments.

The estimates of U.S. private-industry gross product were recently revised. See Sherlene K.S. Lum, Brian C. Moyer, and Robert E. Yuskavage, "improved Estimates of Gross Product by industry for 1947-98," SURVEY OF CURRENT BUSINESS 80 (June 2000): 24-54.

The record new foreign investments in 1998 included acquisitions of several very large U.S. companies.(2) These investments, which coincided with a sharp increase in overall merger and acquisition activity in the United States, reflected both the continuing strength and stability of the U.S. economy and several industry-specific factors.(3) By industry, the impact of acquisitions on affiliate gross product was most pronounced in manufacturing, particularly in transportation equipment and in petroleum and coal products.(4)

The effect of the record new investments on affiliate gross product in 1998 was partly offset by foreign selloffs of affiliates, most notably large minority-owned affiliates in the transportation and the broadcasting and telecommunications industries. In addition, the gross product of petroleum affiliates was reduced by unfavorable conditions in the world market for petroleum products.(5)

Other measures of affiliate operations were also boosted by the record new foreign investments in 1998. Employment by affiliates increased 8 percent to 5.6 million; the affiliate share of U.S. private nonbank employment increased to 5.2 percent, the highest share since 1991. Exports of goods by affiliates increased 7 percent in the face of a 1-percent decrease in total U.S. exports, and imports of goods by affiliates increased 9 percent, compared with a 5-percent increase in total U.S. imports. The affiliate share of U.S. exports of goods increased to 22.1 percent from 20.5 percent in 1997, and the affiliate share of U.S. imports of goods increased to 31.8 percent from 30.4 percent in 1997. Intrafirm exports and imports by affiliates, however, were largely unaffected by new foreign investments, and the shares of these exports and imports in total U.S. exports and imports of goods decreased.

The following are additional highlights of the operations of U.S. affiliates in 1998:

* By country of ownership, the United Kingdom remained the largest investing country in terms of affiliate gross product. As a result of new acquisitions of U.S. companies, Germany overtook Japan as the second-largest investing country.

* By industry, manufacturing's share of the gross product of all affiliates increased to more than 50 percent. Affiliate gross product in professional, scientific, and technical services also increased substantially.

* The affiliate share of U.S. employment in manufacturing increased to more than 13 percent. Within manufacturing, the affiliate share of employment in motor vehicles, bodies and trailers, and parts increased substantially, from 18.5 percent to 28.2 percent.

* By State, the affiliate share of total business employment was highest in Hawaii, South Carolina, and North Carolina. The affiliate share increased substantially in several States in the Great Lakes region, particularly in Michigan.

* Exports and imports of goods by affiliates increased substantially as a result of new foreign acquisitions. For German-owned affiliates, exports more than doubled, and imports increased more than 70 percent.

* Intrafirm exports by affiliates (which were relatively unaffected by foreign acquisitions) decreased, reflecting troubled economic conditions in Asia. Intrafirm imports by affiliates increased only slightly, and the share of affiliate intrafirm imports in total U.S. imports decreased.

This article examines changes in the gross product, employment, and trade in goods of U.S. affiliates in 1998, particularly as they relate to the corresponding totals for the U.S. economy. For each of these measures, changes in affiliate operations are examined both at the aggregate level and by major investing country; changes in gross product are also examined by industry of affiliate. For employment, affiliate share,; of the economy are examined by industry and by State.

Gross Product

Largely as a result of the surge in new foreign direct investment in 1998, the gross product (or value added) of nonbank U.S. affiliates in current dollars increased 7 percent, from $389 billion to $418 billion. In comparison, total U.S. gross product originating in private nonbank industries in current dollars increased 6 percent.(6) The U.S.-affiliate share of total U.S. gross product edged up from 6.2 percent in 1997 to 6.3 percent in 1998, continuing an uptrend.

Despite record new investments, affiliate gross product increased at a slower pace than in the previous 2 years (9 percent in 1997 and 11 percent in 1996), partly because of the offsetting effect of foreign selloffs. In 1998, these selloffs mainly affected minority-owned affiliates. For majority-owned affiliates (which have consistently accounted for at least three-fourths of affiliate operations), the offsetting effect of foreign selloffs was relatively small. The gross product of majority-owned affiliates increased 12 percent, the fastest rate of increase since 1990. The share of these affiliates in U.S. gross product originating in private industries increased from 5.0 percent in 1997 to 5.3 percent in 1998.

By country of ownership

Affiliates with ultimate beneficial owners (UBO's) in seven major investing countries--Canada, France, Germany, Japan, the Netherlands, Switzerland, and the United Kingdom--have accounted for more than 80 percent of the gross product of all nonbank affiliates since at least 1977, the first year for which annual data on affiliate operations are available. In 1998, as in each of the years 1977-97, the largest investing country in terms of affiliate gross product was the United Kingdom: British-owned affiliates accounted for 18.2 percent of the gross product of all nonbank affiliates and for 1.1 percent of total U.S. gross product originating in private industries (table 2). German-owned affiliates accounted for the second-largest share of affiliate gross product (15.9 percent), edging out Japanese-owned affiliates, which had accounted for the second-largest share in each of the years 1991-97. The share for German-owned affiliates was substantially higher in 1998 than in previous years: As recently as 1994, Germany had ranked as the fourth largest investing country, behind the United Kingdom, Japan, and Canada (chart 2).

[Chart 2 OMITTED]

Table 2.--Gross Product of Nonbank U.S. Affiliates by Country of Ultimate Beneficial Owner, 1996-98

 Millions of dollars

 1996 1997 1998

 All nonbank
 affiliates:

 All countries 358,085 389,432 418,138

Canada 32,550 34,732 40,425

Europe 229,286 248,970 267,066
 France 34,227 36,182 37,349
 Germany 42,929 46,330 66,597
 Netherlands 30,078 34,740 29,464
 Switzerland 20,677 26,331 28,039
 United Kingdom 76,602 78,289 76,214
 Other 24,773 27,099 29,404

Latin America and Other
Western Hemisphere 12,955 13,682 16,995

Africa 2,555 2,870 2,543

Middle East 6,387 7,481 4,614

Asia and Pacific 69,190 74,541 78,714
 Japan 58,069 63,017 65,482
 Other 11,121 11,524 13,232

United States 5,161 7,156 7,780

 Majority-owned
 nonbank affiliates:

 All countries 283,422 313,655 352,756
Canada 27,687 29,779 34,635

Europe 180,729 199,458 228,162
 France 23,166 24,356 25,347
 Germany 34,224 36,914 57,658
 Netherlands 25,060 27,797 26,314
 Switzerland 17,764 22,268 22,956
 United Kingdom 60,898 66,112 71,064
 Other 19,617 22,013 24,823

Latin America and Other
Western Hemisphere 10,841 12,126 15,421

Africa 1,048 1,659 1,339

Middle East 2,058 2,619 2,422

Asia and Pacific 59,496 65,069 67,496
 Japan 50,412 55,280 56,617
 Other 9,084 9,789 10,879

United States 1,563 2,994 3,282

 Percentage of all-countries total

 1996 1997 1998

 All nonbank
 affiliates:

 All countries 100.0 100.0 100.0

Canada 9.1 8.9 9.7

Europe 64.0 63.9 63.9
 France 9.6 9.3 8.9
 Germany 12.0 11.9 15.9
 Netherlands 8.4 8.9 7.0
 Switzerland 5.8 6.8 6.7
 United Kingdom 21.4 20.1 18.2
 Other 6.9 7.0 7.0

Latin America and Other
Western Hemisphere 3.6 3.5 4.1

Africa .7 .7 .6

Middle East 1.8 1.9 1.1

Asia and Pacific 19.3 19.1 18.8
 Japan 16.2 16.2 15.7
 Other 3.1 3.0 3.2

United States 1.4 1.8 1.9

 Majority-owned
 nonbank affiliates:

 All countries 100.0 100.0 100.0
Canada 9.8 9.5 9.8

Europe 63.8 63.6 64.7
 France 8.2 7.8 7.2
 Germany 12.1 11.8 16.3
 Netherlands 8.8 8.9 7.5
 Switzerland 6.3 7.1 6.5
 United Kingdom 21.5 21.1 20.1
 Other 6.9 7.0 7.0

Latin America and Other
Western Hemisphere 3.8 3.9 4.4

Africa .4 .5 .4

Middle East .7 .8 .7

Asia and Pacific 21.0 20.7 19.1
 Japan 17.8 17.6 16.0
 Other 3.2 3.1 3.1

United States .6 1.0 .9

 Percentage of U.S. private-industry
 gross product

 1998 1997 1998

 All nonbank
 affiliates:

 All countries 6.1 6.2 6.3

Canada .6 .6 .6

Europe 3.9 3.9 4.0
 France .6 .6 .6
 Germany .7 .7 1.0
 Netherlands .5 .6 .4
 Switzerland .3 .4 .4
 United Kingdom 1.3 1.2 1.1
 Other .4 .4 .4

Latin America and Other
Western Hemisphere .2 .2 .3

Africa (*) (*) (*)

Middle East .1 .1 .1

Asia and Pacific 1.2 1.2 1.2
 Japan 1.0 1.0 1.0
 Other .2 .2 .2

United States .1 .1 .1

 Majority-owned
 nonbank affiliates:

 All countries 4.8 5.0 5.3
Canada .5 .5 .5

Europe 3.1 3.2 3.4
 France .4 .4 .4
 Germany .6 .6 .9
 Netherlands .4 .4 .4
 Switzerland .3 .4 .3
 United Kingdom 1.0 1.0 1.1
 Other .3 .3 .4

Latin America and Other
Western Hemisphere .2 .2 .2

Africa (*) (*) (*)

Middle East (*) (*) (*)

Asia and Pacific 1.0 1.0 1.0
 Japan .9 .9 .8
 Other .2 .2 .2

United States (*) (*) (*)

 Addendum:
 Percent
 change in
 affiliate gross
 product,
 1997-98

 All nonbank
 affiliates:

 All countries 7.4

Canada 16.4

Europe 7.3
 France 3.2
 Germany 43.7
 Netherlands -15.2
 Switzerland 6.5
 United Kingdom -2.7
 Other 8.5

Latin America and Other
Western Hemisphere 24.2

Africa -11.4

Middle East -38.3

Asia and Pacific 5.6
 Japan 3.9
 Other 14.8

United States 8.7

 Majority-owned
 nonbank affiliates:

 All countries 12.5
Canada 16.3

Europe 14.4
 France 4.1
 Germany 56.2
 Netherlands -5.3
 Switzerland 3.1
 United Kingdom 7.5
 Other 12.8

Latin America and Other
Western Hemisphere 27.2

Africa -19.3

Middle East -7.5

Asia and Pacific 3.7
 Japan 2.4
 Other 11.1

United States 9.6

(*) Less than 0.05 percent.

The jump in share for German-owned affiliates reflected a 44-percent increase in gross product that mainly resulted from German acquisitions of U.S. manufacturing companies, particularly in transportation equipment. In contrast, the gross product of Japanese-owned affiliates increased only 4 percent, reflecting little new direct investment from Japan.(7)

Although there was large-scale new investment from the United Kingdom in 1998, the gross product of British-owned affiliates decreased as a result of selloffs (mainly of minority-owned affiliates) and of reductions in the value added of existing affiliates (which partly reflected unfavorable conditions in the world market for petroleum products). These factors were also primarily responsible for a large decrease in the gross product of Netherlands-owned affiliates.

By industry of affiliate

In 1998, affiliates classified in manufacturing accounted for more than half of the gross product of all nonbank affiliates (table 3). Among other sectors, the gross product of affiliates was largest in wholesale trade, which includes a number of large affiliates with substantial secondary operations in manufacturing.

Table 3.--Gross Product of Nonbank U.S. Affiliates by Industry of Affiliate, 1997 and 1998

 Millions of dollars

 1997 1998

 All nonbank affiliates:

 All industries 389,432 418,138

Manufacturing 190,635 224,372

 Food 11,092 10,796
 Petroleum and coal products 23,476 26,445
 Chemicals 41,199 42,935
 Plastics and rubber
 products 7,772 9,157
 Nonmetallic mineral
 products 12,005 11,793
 Primary metals 8,526 9,847
 Fabricated metal products 8,275 7,402
 Machinery 13,856 14,622
 Computers and electronic
 products 18,177 19,402
 Electrical equipment,
 appliances, and
 components 9,534 9,925
 Transportation equipment 14,694 36,056
 Other 22,029 25,991

Wholesale trade 49,375 51,292
Retail trade 24,960 26,032
Information 27,838 23,186
Finance (except depository
 institutions) and insurance 27,820 23,954
Real estate and rental
 and leasing 8,987 9,679
Professional, scientific, and
 technical services 6,347 7,961
Other industries 53,469 51,662

Majority-owned affiliates:

All industries 313,655 352,756

Manufacturing 169,279 201,870

 Food 9,929 9,716
 Petroleum and coal products 19,764 23,252
 Chemicals 38,050 39,637
 Plastics and rubber
 products 7,136 8,357
 Nonmetallic mineral
 products 11,472 11,242
 Primary metals 5,155 6,328
 Fabricated metal products 6,506 6,776
 Machinery 12,778 13,667
 Computers and electronic
 products 17,425 17,810
 Electrical equipment,
 appliances, and
 components 9,020 9,545
 Transportation equipment 12,970 33,862
 Other 19,074 21,678

Wholesale trade 44,489 47,122
Retail trade 15,901 17,043
Information 11,483 13,746
Finance (except depository
 institutions) and insurance 23,550 19,970
Real estate and rental and
 leasing 7,027 7,678
Professional, scientific, and
 technical services 5,619 6,665
Other industries 36,307 38,663

 Percentage of all-
 industries total

 1997 1998

 All nonbank affiliates:

 All industries 100.0 100.0

Manufacturing 49.0 53.7

 Food 2.8 2.6
 Petroleum and coal products 6.0 6.3
 Chemicals 10.6 10.3
 Plastics and rubber
 products 2.0 2.2
 Nonmetallic mineral
 products 3.1 2.8
 Primary metals 2.2 2.4
 Fabricated metal products 2.1 1.8
 Machinery 3.6 3.5
 Computers and electronic
 products 4.7 4.6
 Electrical equipment,
 appliances, and
 components 2.4 2.4
 Transportation equipment 3.8 8.6
 Other 5.7 6.2

Wholesale trade 12.7 12.3
Retail trade 6.4 6.2
Information 7.1 5.5
Finance (except depository
 institutions) and insurance 7.1 5.7
Real estate and rental
 and leasing 2.3 2.3
Professional, scientific, and
 technical services 1.6 1.9
Other industries 13.7 12.4

Majority-owned affiliates:

All industries 100.0 100.0

Manufacturing 54.0 57.2

 Food 3.2 2.8
 Petroleum and coal products 6.3 6.6
 Chemicals 12.1 11.2
 Plastics and rubber
 products 2.3 2.4
 Nonmetallic mineral
 products 3.7 3.2
 Primary metals 1.6 1.8
 Fabricated metal products 2.1 1.9
 Machinery 4.1 3.9
 Computers and electronic
 products 5.6 5.0
 Electrical equipment,
 appliances, and
 components 2.9 2.7
 Transportation equipment 4.1 9.6
 Other 6.1 6.1

Wholesale trade 14.2 13.4
Retail trade 5.1 4.8
Information 3.7 3.9
Finance (except depository
 institutions) and insurance 7.5 5.7
Real estate and rental and
 leasing 2.2 2.2
Professional, scientific, and
 technical services 1.8 1.9
Other industries 11.6 11.0

 Addendum:
 Percent
 change in
 affiliate gross
 product,
 1997-98

 All nonbank affiliates:

 All industries 7.4

Manufacturing 17.7

 Food -2.7
 Petroleum and coal products 12.6
 Chemicals 4.2
 Plastics and rubber
 products 17.8
 Nonmetallic mineral
 products -1.8
 Primary metals 15.5
 Fabricated metal products -10.5
 Machinery 5.5
 Computers and electronic
 products 6.7
 Electrical equipment,
 appliances, and
 components 4.1
 Transportation equipment 145.4
 Other 18.0

Wholesale trade 3.9
Retail trade 4.3
Information -16.7
Finance (except depository
 institutions) and insurance -13.9
Real estate and rental
 and leasing 7.7
Professional, scientific, and
 technical services 25.4
Other industries -3.4

Majority-owned affiliates:

All industries 12.5

Manufacturing 19.3

 Food -2.1
 Petroleum and coal products 17.6
 Chemicals 4.2
 Plastics and rubber
 products 17.1
 Nonmetallic mineral
 products -2.0
 Primary metals 22.8
 Fabricated metal products 4.2
 Machinery 7.0
 Computers and electronic
 products 2.2
 Electrical equipment,
 appliances, and
 components 5.8
 Transportation equipment 161.1
 Other 13.7

Wholesale trade 5.9
Retail trade 7.2
Information 19.7
Finance (except depository
 institutions) and insurance -15.2
Real estate and rental and
 leasing 9.3
Professional, scientific, and
 technical services 18.6
Other industries 6.5

Manufacturing's share of total affiliate gross product increased from 49 percent in 1997 to 54 percent in 1998. Within manufacturing, the gross product of affiliates classified in transportation equipment more than doubled, mainly as a result of new foreign acquisitions and of changes in the industry classification of affiliates with operations in more than one industry.(8) Affiliate gross product also increased substantially in plastics and rubber products, in primary metals, and in petroleum and coal products. In plastics and rubber products and in primary metals, the increases reflected both new acquisitions and expansions in the operations of existing affiliates. In petroleum and coal products, a large increase in gross product from new foreign acquisitions was partly offset by reductions in the value added of existing affiliates that reflected the unfavorable conditions in the world petroleum markets.

Outside of manufacturing, new acquisitions boosted the gross product of affiliates in professional, scientific, and technical services. Decreases in affiliate gross product in finance (except depository institutions) and insurance and in information were mainly due to selloffs. In information, the decrease was more than accounted for by selloffs of minority-owned affiliates.

Employment

In 1998, employment by affiliates increased 8 percent, the fastest rate of increase since 1989 (table 4). The increase, from 5.2 million to 5.6 million, was mainly due to foreign acquisitions of existing U.S. companies.

Table 4.--Employment of Nonbank U.S. Affiliates of Foreign Companies, 1977-98

 Thousands of
 employees

 All nonbank Majority-
 affiliates owned
 nonbank
 affiliates

1977 1,218.7 n.a.
1978 1,429.9 n.a.
1979 1,753.2 n.a.
1980 2,033.9 n.a.
1981 2,416.6 n.a.
1982 2,448.1 n.a.
1983 2,546.5 n.a.
1984 2,714.3 n.a.
1985 2,862.2 n.a.
1986 2,937.9 n.a.
1987 3,224.3 2,602.7
1988 3,844.2 3,119.0
1989 4,511.5 3,573.4
1990 4,734.5 3,841.7
1991 4,871.9 3,991.3
1992 4,715.4 3,903.9
1993 4,765.6 3,851.7
1994 4,840.5 3,954.0
1995 4,941.8 4,022.6
1996 5,105.0 4,155.6
1997(r) 5,201.9 4,269.1
1998(p) 5,633.0 4,655.0

Percent change from
 preceding year:

1988 19.2 19.8
1989 17.4 14.6
1990 4.9 7.5
1991 2.9 3.9
1992 -3.2 -2.2
1993 1.1 -1.3
1994 1.6 2.7
1995 2.1 1.7
1996 3.3 3.3
1997(r) 1.9 2.7
1998(p) 8.3 9.0

 Percentage of U.S.
 private-industry
 employment

 All nonbank Majority-
 affiliates owned
 nonbank
 affiliates

1977 1.7 n.a.
1978 1.9 n.a.
1979 2.3 n.a.
1980 2.7 n.a.
1981 3.1 n.a.
1982 3.2 n.a.
1983 3.3 n.a.
1984 3.4 n.a.
1985 3.4 n.a.
1986 3.5 n.a.
1987 3.7 3.0
1988 4.3 3.5
1989 4.9 3.9
1990 5.1 4.2
1991 5.3 4.4
1992 5.1 4.3
1993 5.0 4.1
1994 4.9 4.1
1995 4.9 4.0
1996 5.0 4.1
1997(r) 4.9 4.0
1998(p) 5.2 4.3

Percent change from
 preceding year:

1988 ... ...
1989 ... ...
1990 ... ...
1991 ... ...
1992 ... ...
1993 ... ...
1994 ... ...
1995 ... ...
1996 ... ...
1997(r) ... ...
1998(p) ... ...

 Addendum: Gross
 product of majority-
 owned nonbank
 affiliates as a per-
 centage of that of
 all nonbank
 affiliates

1977 n.a.
1978 n.a.
1979 n.a.
1980 n.a.
1981 n.a.
1982 n.a.
1983 n.a.
1984 n.a.
1985 n.a.
1986 n.a.
1987 80.7
1988 81.1
1989 79.2
1990 81.1
1991 81.9
1992 82.8
1993 80.8
1994 81.7
1995 81.4
1996 81.4
1997(r) 82.1
1998(p) 82.6

Percent change from
preceding year:

1988 ...
1989 ...
1990 ...
1991 ...
1992 ...
1993 ...
1994 ...
1995 ...
1996 ...
1997(r) ...
1998(p) ...

(p) Preliminary.

(r) Revised.

n.a. Not available.

NOTES.--For improved comparability with U.S.-affiliate employment, U.S. private-industry employment was adjusted to exclude employment in depository institutions and private households.

For consistency with the coverage of the data on U.S. private-industry employment, U.S.-affiliate employment in Puerto Rico, in "other U.S. areas," and in "foreign" was excluded from the U.S.-affiliate total when the employment shares were computed.

The affiliate share of U.S. private industry employment increased from 4.9 percent in 1997 to 5.2 percent in 1998 after remaining in the narrow range of 4.9-5.0 percent for several years.(9) The share of employment for majority-owned affiliates also increased, from 4.0 percent to 4.3 percent.

By industry

At the broad sectoral level, the affiliate share of U.S. employment in 1998 was highest in mining (15.5 percent), followed by manufacturing (13.4 percent), information (7.5 percent), and wholesale trade (6.6 percent) (table 5).(10) For majority-owned affiliates, the shares in U.S. employment were also highest in mining (13.7 percent) and manufacturing (12.0 percent); however, the share in information (4.9 percent) was lower than that in wholesale trade (5.9 percent). Majority-owned affiliates accounted for about 90 percent of affiliate employment in the mining, manufacturing, and wholesale trade sectors, but they accounted for less than two-thirds of affiliate employment in information. Within information, majority-owned affiliates accounted for less than one-fourth of affiliate employment in broadcasting and telecommunications, a subsector that includes industries that have been subject to restrictions on foreign ownership.

Table 5.--Employment by Nonbank U.S. Affiliates by Industry of Sales, 1997 and 1998

 Thousands of employees

 All nonbank
 affiliates

 1997 1998

 All industries(2) 5.201.9 5,633.0

Agriculture, forestry, fishing, and hunting 23.4 24.6
Mining, excluding oil and gas extraction 63.9 60.4
Utilities 8.9 7.8
Construction 69.2 79.7

Manufacturing(3) 2,103.0 2,295.3

 Food 141.6 143.0
 Beverages and tobacco 29.7 36.2
 Textile mills 28.9 26.4
 Textile product mills 16.0 16.3
 Apparel 34.9 28.5
 Leather and allied products 2.3 2.9
 Wood products 11.6 13.7
 Paper 61.4 85.4
 Printing and related support activities 53.4 52.6
 Petroleum and coal products(4) 39.3 37.8
 Chemicals 305.6 312.8
 Pharmaceuticals and medicines 97.7 101.2
 Other 207.9 211.6
 Plastics and rubber products 140.5 147.9
 Nonmetallic mineral products 109.8 121.9
 Primary metals 92.9 99.3
 Fabricated metal products 119.4 127.0
 Machinery 200.6 200.9
 Computer and electronic products 258.4 266.7
 Electrical equipment, appliances,
 and components 115.5 115.2
 Transportation equipment 242.2 357.8
 Motor vehicles, bodies and
 trailers, and parts 210.9 323.8
 Other 31.4 34.1
 Furniture and related products 16.3 15.7
 Miscellaneous manufacturing 82.5 87.3

Wholesale trade 379.2 392.9
Retail trade 718.6 718.2
Transportation and warehousing 182.2 146.9

Information 266.5 238.5
 Publishing industries 71.5 81.8
 Motion picture and sound
 recording industries 35.3 30.0
 Broadcasting and telecommunications 129.0 95.1
 Information services and data
 processing services 30.6 31.6

Finance (except depository institutions)
 and insurance 221.3 235.2
 Finance, except depository institutions 78.1 93.1
 Insurance carriers and related
 activities 143.3 142.1

Real estate and rental and leasing 54.7 60.7
Professional, scientific, and
 technical services(5) 135.4 158.7
Management of nonbank companies
 and enterprises 3.1 2.1
Administration, support, waste management,
 and remediation services 276.3 390.0
Educational services(5) 7.1 10.0
Health care and social assistance(5) 122.0 132.5
Arts, entertainment, and recreation(5) 39.6 41.5
Accommodation and food services 293.2 355.9
Other services (except public
 administration and private
 households)(5) 51.4 59.6

Auxiliaries, except management of
 companies and enterprises 149.2 181.1

Unspecified(6) 33.8 41.4

 Thousands of employees

 Majority-owned
 nonbank affiliates

 1997 1998

All industries(2) 4,269.1 4,655.0

Agriculture, forestry, fishing, and hunting 12.1 12.7
Mining, excluding oil and gas extraction 50.5 53.4
Utilities 3.9 4.6
Construction 58.4 65.8

Manufacturing(3) 1,875.9 2,057.0

 Food 123.8 126.3
 Beverages and tobacco 29.0 30.5
 Textile mills 24.7 22.0
 Textile product mills 11.4 11.9
 Apparel 20.9 17.0
 Leather and allied products 1.4 2.0
 Wood products 8.3 9.8
 Paper 44.5 46.8
 Printing and related support activities 52.3 50.2
 Petroleum and coal products(4) 31.0 33.9
 Chemicals 281.2 285.0
 Pharmaceuticals and medicines 92.6 97.4
 Other 188.6 187.6
 Plastics and rubber products 127.8 135.1
 Nonmetallic mineral products 103.3 115.4
 Primary metals 69.6 77.0
 Fabricated metal products 106.7 121.4
 Machinery 185.3 186.7
 Computer and electronic products 237.2 247.1
 Electrical equipment, appliances,
 and components 110.4 110.5
 Transportation equipment 220.7 336.8
 Motor vehicles, bodies and
 trailers, and parts 190.2 303.8
 Other 30.5 33.0
 Furniture and related products 15.6 15.5
 Miscellaneous manufacturing 70.9 76.1

Wholesale trade 339.5 351.0
Retail trade 530.0 541.0
Transportation and warehousing 123.2 134.9

Information 140.7 154.5
 Publishing industries 62.0 72.8
 Motion picture and sound
 recording industries 33.8 29.7
 Broadcasting and telecommunications 14.9 22.1
 Information services and data
 processing services 30.1 30.0

Finance (except depository institutions)
 and insurance 192.8 198.1
 Finance, except depository institutions 73.1 81.5
 Insurance carriers and related
 activities 119.7 116.6

Real estate and rental and leasing 42.8 46.6
Professional, scientific, and
 technical services(5) 121.3 135.0
Management of nonbank companies
 and enterprises 2.6 2.0
Administration, support, waste management,
 and remediation services 218.0 299.3
Educational services(5) 6.0 7.6
Health care and social assistance(5) 92.4 102.8
Arts, entertainment, and recreation(5) 32.6 25.0
Accommodation and food services 218.8 212.1
Other services (except public
 administration and private
 households)(5) 48.2 54.7

Auxiliaries, except management of
 companies and enterprises 126.6 156.8

Unspecified(6) 32.8 40.2

 Percentage of total
 U.S. employment in
 nonbank private
 industries(1)

 All nonbank
 affiliates

 1997 1998

All industries(2) 4.9 5.2

Agriculture, forestry, fishing, and hunting n.a. n.a.
Mining, excluding oil and gas extraction 16.0 15.1
Utilities 1.3 1.1
Construction 1.2 1.4

Manufacturing(3) 12.4 13.5

 Food 9.6 9.8
 Beverages and tobacco 16.8 21.0
 Textile mills 7.4 6.8
 Textile product mills 6.8 7.5
 Apparel 4.9 4.3
 Leather and allied products 2.7 3.6
 Wood products 2.0 2.4
 Paper 10.7 15.0
 Printing and related support activities 6.4 6.2
 Petroleum and coal products(4) 18.1 18.2
 Chemicals 34.8 34.7
 Pharmaceuticals and medicines 49.1 46.6
 Other 30.7 31.0
 Plastics and rubber products 13.7 14.4
 Nonmetallic mineral products 21.6 24.0
 Primary metals 15.2 16.1
 Fabricated metal products 6.8 7.0
 Machinery 14.2 13.9
 Computer and electronic products 15.3 15.9
 Electrical equipment, appliances,
 and components 19.4 19.1
 Transportation equipment 13.1 18.7
 Motor vehicles, bodies and
 trailers, and parts 18.5 27.8
 Other 4.4 4.6
 Furniture and related products 2.7 2.6
 Miscellaneous manufacturing 11.4 11.8

Wholesale trade 6.5 6.7
Retail trade 5.1 5.0
Transportation and warehousing 6.2 4.2

Information 8.7 7.6
 Publishing industries 7.1 8.1
 Motion picture and sound
 recording industries 12.8 10.6
 Broadcasting and telecommunications 9.0 6.5
 Information services and data
 processing services 8.8 82.0

Finance (except depository institutions)
 and insurance 5.8 6.1
 Finance, except depository institutions 5.3 6.1
 Insurance carriers and related
 activities 6.1 6.1

Real estate and rental and leasing 3.2 3.4
Professional, scientific, and
 technical services(5) 2.6 2.7
Management of nonbank companies
 and enterprises n.a. n.a.
Administration, support, waste management,
 and remediation services 3.8 5.0
Educational services(5) 2.8 n.a.
Health care and social assistance(5) 2.0 2.1
Arts, entertainment, and recreation(5) 3.3 3.4
Accommodation and food services 3.1 3.8
Other services (except public
 administration and private
 households)(5) 2.1 n.a.

Auxiliaries, except management of
 companies and enterprises n.a. n.a.

Unspecified(6) ... ...

 Percentage of total
 U.S. employment in
 nonbank private
 industries(1)

 Majority-owned
 nonbank affiliates

 1997 1998

All industries(2) 4.0 4.3

Agriculture, forestry, fishing, and hunting n.a. n.a.
Mining, excluding oil and gas extraction 12.7 13.3
Utilities .6 .7
Construction 1.0 1.1

Manufacturing(3) 11.0 12.1

 Food 8.4 8.6
 Beverages and tobacco 16.5 17.6
 Textile mills 6.3 5.7
 Textile product mills 4.9 5.5
 Apparel 2.9 2.5
 Leather and allied products 1.7 2.5
 Wood products 1.4 1.7
 Paper 7.7 8.2
 Printing and related support activities 6.3 5.9
 Petroleum and coal products(4) 14.2 16.3
 Chemicals 32.1 31.6
 Pharmaceuticals and medicines 46.5 44.8
 Other 27.8 27.4
 Plastics and rubber products 12.5 13.1
 Nonmetallic mineral products 20.5 22.7
 Primary metals 11.4 12.5
 Fabricated metal products 6.0 6.7
 Machinery 13.1 12.9
 Computer and electronic products 14.0 14.7
 Electrical equipment, appliances,
 and components 18.6 18.4
 Transportation equipment 11.9 17.6
 Motor vehicles, bodies and
 trailers, and parts 16.7 26.1
 Other 4.3 4.4
 Furniture and related products 2.6 2.6
 Miscellaneous manufacturing 9.8 10.3

Wholesale trade 5.9 6.0
Retail trade 3.8 3.8
Transportation and warehousing 4.2 3.9

Information 4.6 4.9
 Publishing industries 6.2 7.2
 Motion picture and sound
 recording industries 12.2 10.5
 Broadcasting and telecommunications 1.0 1.5
 Information services and data
 processing services 8.6 7.8

Finance (except depository institutions)
 and insurance 5.1 5.2
 Finance, except depository institutions 5.0 5.4
 Insurance carriers and related
 activities 5.1 5.0

Real estate and rental and leasing 2.5 2.6
Professional, scientific, and
 technical services(5) 2.3 2.3
Management of nonbank companies
 and enterprises n.a n.a
Administration, support, waste management,
 and remediation services 3.0 3.8
Educational services(5) 2.4 n.a
Health care and social assistance(5) 1.5 1.6
Arts, entertainment, and recreation(5) 2.7 2.1
Accommodation and food services 2.3 2.2
Other services (except public
 administration and private
 households)(5) 1.9 n.a

Auxiliaries, except management of
 companies and enterprises n.a. n.a

Unspecified(6) ... ...

n.a. Data required to compute shares are not available.

(1.) The data on U.S. employment in private industries that were used in calculating these percentages are classified by industry of establishment. For "all industries," they are from table 6.4C of the "National Income and Product Accounts (NIPA) Tables" in this issue of the SURVEY OF CURRENT BUSINESS. For industries at the sectoral level or below, the data for 1997 are from the Census Bureau's 1997 Economic Census, and the data for 1998 are from the Census Bureau's County Business Patterns.

For "all industries," the total for U.S. employment in nonbank private industries is equal to employment in private industries less the employment of depository restitutions and private households. The U.S. private-industry employment totals used to calculate the affiliate shares in "all industries" in this table differ from the U,S. employment totals used to calculate affiliate shares in table 6; the latter are from BEA's Regional Economic Information System. The estimates in table 6. unlike those used for this table, do not exclude employment in depository institutions. In addition, the estimates used for table 6, unlike those used for this table, exclude U.S. residents temporarily employed abroad by U.S. businesses. They may also differ from NIPA estimates used for "all industries" in this table because of different definitions and revision schedules.

(2.) For consistency with the coverage of the data on U.S. employment in private industries, U.S.-affiliate employment in Puerto Rico, in "other U.S. areas," and in "foreign" was excluded from the U,S.-affiliate employment total when the percentage shares on this line were computed.

(3.) Total affiliate manufacturing employment and the shares of all-U.S.-business manufacturing employment accounted for by affiliates shown in this table differ from those shown in table 7. In this table, employment is classified by industry of sales, and the total for manufacturing includes some nonmanufacturing employees (see the box "Using Employment Data to Estimate Affiliate Shares of the Economy by Industry"), whereas in table 7, affiliate manufacturing employment consists only of employees on the payrolls of manufacturing plants. Data on the latter basis are not available for the subindustries within manufacturing shown in this table. In addition, the total for manufacturing in this table includes oil and gas extraction, which is excluded from the total in table 7.

(4.) For both U.S. affiliates and all U.S. businesses, includes oil and gas extraction. (See note below.)

(5.) The data on U,S, employment used to calculate the percentages shown on this line cover taxable establishments only. For this industry, a breakdown between employment in taxable and tax-exempt establishments is included in data from the 1997 Economic Census but not in the data from County Business Patterns. Employment in taxable establishments in 1998 was estimated by applying the ratio of employment in taxable establishments to total employment in the industry from the 1997 Economic Census data to the employment data from County Business Patterns.

(6.) This tine includes all employment that U.S. affiliates did not specify in terms of industry of sales when they filled out their survey form. Affiliates that filed the long form (that is, affiliates with assets, sales, or net income or loss greater than $100 million) had to specify only their 10 largest sales categories, and affiliates that filed the short form had to specify only their 4 largest sales categories.

NOTE.--A significant portion of U.S.-affiliate employment in petroleum and coal products is accounted for by integrated petroleum companies that have, in addition to their manufacturing employees, substantial numbers of employees in petroleum extraction; because these employees cannot be identified separately, they are included in petroleum and coat products manufacturing. For consistency, employees of affiliates classified in the "oil and gas extraction without refining" industry and employees of all U.S. businesses in oil and gas extraction are also included in petroleum and coal products manufacturing rather than in mining.

Among the subsectors in manufacturing, the affiliate share of all-U.S.-business employment in 1998 was highest in chemicals (35.4 percent). Within chemicals, affiliates accounted for nearly 50 percent of employment in pharmaceuticals and medicines, a research-intensive industry that is characterized by proprietary assets that favor the internalization of production activities within large multinational firms. In contrast, the affiliate share of employment was less than 3 percent in two low-technology manufacturing subsectors-wood products and furniture and related products.

The affiliate share of employment in manufacturing increased from 12.4 percent in 1997 to 13.4 percent in 1998. Within manufacturing, the affiliate share increased the most in transportation equipment, in paper, and in beverages and tobacco. In transportation equipment, the affiliate share of employment in motor vehicles, bodies and trailers, and parts jumped from 18.5 percent to 28.2 percent, reflecting both foreign acquisitions of U.S. companies and expanded operations of existing affiliates. In paper and in beverages and tobacco, the increases in affiliate share largely reflected foreign acquisitions of minority ownership shares in U.S. companies. The shares of employment in these two subsectors that were accounted for by majority-owned affiliates increased only marginally.

Outside of manufacturing, the affiliate share of employment increased substantially in administration, support, waste management, and remediation services, largely as a result of foreign acquisitions of U.S. companies specializing in employment services.

The affiliate share of employment decreased substantially in transportation and warehousing and in information. In both sectors, the decreases were mainly due to selloffs of foreign minority-ownership shares in large U.S. companies. Within information, the effect of these selloffs was most pronounced in broadcasting and telecommunications, where the affiliate share decreased from 9.0 percent to 6.4 percent. A decrease in the affiliate share of employment in the motion picture and sound recording industries subsector mainly reflected foreign selloffs of majority-owned affiliates.

By State

In 1998, as in earlier years, the affiliate shares of private-industry employment were highest in Hawaii (10.4 percent), South Carolina (8.2 percent), and North Carolina (7.3 percent); these three States also had the highest shares for majority-owned affiliates (table 6). Employment in manufacturing accounted for more than one-half of affiliate employment in South Carolina and North Carolina but for only 3 percent of affiliate employment in Hawaii (table 7).

Table 6.--Employment by Nonbank U.S. Affiliates by State, 1997 and 1998

 Thousands of employees

 Majority-owned
 All nonbank nonbank
 affiliates affiliates

 1997 1998 1997 1998

 Total(2) 5,201.9 5,633.0 4,269.1 4,655.0

New England 344.8 377.1 302.0 326.2
 Connecticut 89.1 96.1 81.8 89.0
 Maine 32.0 32.2 22.3 22.0
 Massachusetts 163.6 178.4 145.7 157.3
 New Hampshire 31.6 36.0 26.9 30.2
 Rhode Island 19.1 20.8 18.2 18.7
 Vermont 9.4 11.6 7.1 9.0

Mideast 913.3 993.0 774.2 830.9
 Delaware 19.1 24.9 14.9 17.9
 District of Columbia 11.2 13.9 7.3 9.5
 Maryland 91.8 94.1 62.6 66.4
 New Jersey 212.5 235.5 192.3 199.3
 New York 353.5 386.6 297.4 325.9
 Pennsylvania 225.2 238.0 199.7 211.9

Great Lakes 8,396.0 1,006.7 723.1 875.6
 Illinois 224.9 262.8 193.7 219.6
 Indiana 128.9 160.8 113.0 140.1
 Michigan 171.6 235.9 141.1 211.5
 Ohio 236.3 260.9 204.5 226.0
 Wisconsin 77.9 86.3 70.8 78.4

Plains 301.8 299.3 222.2 236.1
 Iowa 37.9 35.9 32.1 31.6
 Kansas 45.8 51.0 30.5 32.6
 Minnesota 99.0 80.5 63.9 66.7
 Missouri 85.0 91.6 68.5 72.7
 Nebraska 20.3 21.6 14.3 15.0
 North Dakota 3.7 8.6 3.3 8.1
 South Dakota 10.1 10.1 9.6 9.4

Southeast 1,372.7 1,454.9 1,124.2 1,192.4
 Alabama 68.0 74.8 52.5 58.6
 Arkansas 34.0 37.2 29.6 30.9
 Florida 242.3 264.0 174.3 185.5
 Georgia 191.0 200.7 160.6 171.9
 Kentucky 90.0 93.4 71.9 74.8
 Louisiana 58.3 59.7 46.2 46.5
 Mississippi 22.9 24.0 17.3 18.3
 North Carolina 226.3 238.8 195.6 206.9
 South Carolina 119.5 125.4 111.4 116.3
 Tennessee 147.5 155.4 127.1 134.5
 Virginia 147.3 152.2 117.5 124.2
 West Virginia 27.6 29.3 20.2 24.0

Southwest 463.9 503.2 356.4 393.4
 Arizona 59.7 63.4 43.0 45.5
 New Mexico 18.3 18.0 11.3 11.4
 Oklahoma 34.7 40.6 29.2 31.5
 Texas 351.2 381.2 272.9 305.0

Rocky Mountain 140.9 143.1 95.4 99.9
 Colorado 81.6 79.6 56.1 58.4
 Idaho 12.4 14.2 7.1 7.7
 Montana 4.5 6.9 2.8 4.6
 Utah 35.3 34.6 24.2 23.2
 Wyoming 7.1 7.8 5.2 6.0

Far West 795.4 831.7 648.5 678.8
 Alaska 9.1 10.6 8.5 9.5
 California 569.6 603.2 467.7 494.4
 Hawaii 50.2 45.4 43.5 40.8
 Nevada 26.5 27.9 19.7 20.9
 Oregon 52.4 54.9 41.8 43.1
 Washington 87.6 89.7 67.3 70.1

Puerto Rico 17.4 16.8 13.8 14.4
Other U.S. areas(3) 10.2 7.3 7.5 7.0
Foreign(4) 1.9 (*) 1.9 (*)

 Percentage of total
 private industry
 employment in the
 State(1)

 Majority-
 All owned
 nonbank nonbank
 affiliates affiliates

 1997 1998 1997 1998

 Total(2) 4.9 5.1 4.0 4.2

New England 5.9 6.3 5.1 5.4
 Connecticut 6.1 6.6 5.6 6.0
 Maine 6.7 6.8 4.7 4.5
 Massachusetts 5.8 6.2 5.2 5.4
 New Hampshire 6.2 6.9 5.3 5.8
 Rhode Island 4.8 5.1 4.6 4.6
 Vermont 3.9 4.7 2.9 3.6

Mideast 5.2 5.5 4.4 4.6
 Delaware 5.6 7.0 4.3 5.0
 District of Columbia 2.8 3.4 1.8 2.3
 Maryland 4.8 4.8 3.3 3.4
 New Jersey 6.6 7.1 6.0 6.0
 New York 5.1 5.5 4.3 4.6
 Pennsylvania 4.7 4.8 4.1 4.3

Great Lakes 4.5 5.3 3.9 4.6
 Illinois 4.4 5.0 3.8 4.2
 Indiana 5.1 8.2 4.5 5.4
 Michigan 4.4 6.0 3.6 5.3
 Ohio 4.9 5.4 4.3 4.6
 Wisconsin 3.3 3.6 3.0 3.3

Plains 3.7 3.6 2.8 2.9
 Iowa 3.1 2.9 2.7 2.5
 Kansas 4.3 4.6 2.8 2.9
 Minnesota 4.5 3.6 2.9 2.9
 Missouri 3.7 3.9 3.0 3.1
 Nebraska 2.8 2.9 2.0 2.0
 North Dakota 1.4 3.3 1.3 3.1
 South Dakota 3.4 3.3 3.2 3.1

Southeast 5.4 5.6 4.4 4.6
 Alabama 4.2 4.7 3.3 3.7
 Arkansas 3.6 3.9 3.1 3.2
 Florida 4.3 4.5 3.1 3.1
 Georgia 6.1 6.2 5.1 5.3
 Kentucky 6.1 6.2 4.9 5.0
 Louisiana 3.8 3.8 3.0 3.0
 Mississippi 2.5 2.5 1.9 1.9
 North Carolina 7.1 7.3 6.1 6.3
 South Carolina 8.1 8.2 7.5 7.6
 Tennessee 6.5 6.7 5.6 5.8
 Virginia 5.4 5.5 4.3 4.5
 West Virginia 4.9 5.1 3.6 4.2

Southwest 4.3 4.5 3.3 3.5
 Arizona 3.4 3.5 2.5 2.5
 New Mexico 3.3 3.2 2.0 2.0
 Oklahoma 3.0 3.7 2.5 2.6
 Texas 4.8 5.0 3.7 4.0

Rocky Mountain 4.0 4.0 2.7 2.8
 Colorado 4.7 4.4 3.2 3.2
 Idaho 2.9 3.2 1.7 1.7
 Montana 1.5 2.2 .9 1.5
 Utah 4.1 3.9 2.8 2.6
 Wyoming 4.1 4.4 3.0 3.4

Far West 4.8 4.9 3.9 4.0
 Alaska 4.5 5.1 4.2 4.6
 California 4.9 5.0 4.0 4.1
 Hawaii 11.4 10.4 9.9 9.3
 Nevada 3.2 3.3 2.4 2.5
 Oregon 4.0 4.1 3.2 3.2
 Washington 4.1 4.0 3.1 3.2

Puerto Rico n.a. n.a. n.a. n.a.
Other U.S. areas(3) n.a. n.a. n.a. n.a.
Foreign(4) n.a. n.a. n.a. n.a.

(*) Less than 50 employees.

(1.) The data on employment in private industries used to calculate the shares shown in this table are from BEA's Regional Economic Information System. The totals are equal to employment in private industries less employment of private households. The U.S. employment totals used to calculate affiliate shares in this table differ from those used for table 4 and the all-industries line of table 5, which are from table 6.4C of the "National Income and Product Accounts (NIPA) Tables? They differ from the NIPA estimates of employment because they include depository institutions, and, by definition, they exclude U.S. residents temporarily employed abroad by U.S. businesses. They also may differ from the NIPA estimates because of different definitions and revision schedules.

(2.) For consistency with the coverage of the private-industry employment data U.S.-affiliate employment in Puerto Rico, in "other U.S. areas," and in "foreign" was excluded from the U.S.-affiliate employment total when the percentage shares on this line were computed.

(3.) Consists of the U.S. Virgin Islands, Guam, American Samoa, and all other outlying U.S. areas.

(4.) Consists of employees of US. affiliates working abroad.

n.a. Not available.

Table 7.--Manufacturing Employment by Nonbank U.S. Affiliates by State, 1997 and 1998

 Thousands of employees

 Majority-owned
 All nonbank nonbank
 affiliates affiliates

 1997 1998 1997 1998

 Total(2) 2,063.7 2,280.7 1,846.3 2,033.1

New England 108.7 117.1 100.1 110.3
 Connecticut 26.7 32.0 24.2 29.6
 Maine 12.9 12.3 11.5 11.2
 Massachusetts 43.8 44.3 40.3 42.2
 New Hampshire 14.6 17.5 13.9 16.9
 Rhode Island 7.2 7.6 7.0 7.3
 Vermont 3.5 3.4 3.2 3.1

Mideast 284.6 303.8 263.8 282.4
 Delaware 7.6 8.4 6.2 7.4
 District of Columbia .5 .7 .5 .6
 Maryland 22.2 22.1 19.9 20.4
 New Jersey 76.5 76.0 72.2 71.4
 New York 75.0 82.0 68.2 74.5
 Pennsylvania 102.8 114.6 98.8 108.1

Great Lakes 454.6 552.7 408.7 495.8
 Illinois 104.4 117.1 95.3 105.0
 Indiana 85.5 115.1 79.0 104.5
 Michigan 84.1 125.8 72.1 111.1
 Ohio 135.9 144.1 120.8 127.4
 Wisconsin 44.7 50.6 41.5 47.8

Plains 127.3 142.5 116.5 129.5
 Iowa 21.4 22.1 21.1 20.8
 Kansas 17.2 19.6 15.3 17.7
 Minnesota 32.5 34.1 28.8 30.4
 Missouri 42.1 47.7 37.9 42.6
 Nebraska 9.0 9.9 8.4 9.2
 North Dakota 1.5 5.1 1.5 5.0
 South Dakota 3.6 4.0 3.5 3.8

Southeast 629.4 658.1 562.4 587.1
 Alabama 42.7 47.2 36.2 41.3
 Arkansas 24.7 26.2 21.6 22.8
 Florida 46.7 53.1 41.2 46.7
 Georgia 83.8 89.3 75.4 80.6
 Kentucky 63.5 66.3 50.1 53.0
 Louisiana 21.0 21.9 18.9 19.1
 Mississippi 12.3 12.8 10.5 11.1
 North Carolina 117.5 121.1 107.7 110.3
 South Carolina 68.5 70.4 65.1 65.7
 Tennessee 86.8 86.9 80.0 79.8
 Virginia 47.8 48.9 44.3 45.5
 West Virginia 14.1 14.0 11.4 11.2

Southwest 166.9 186.5 150.9 172.3
 Arizona 15.5 16.6 13.4 14.2
 New Mexico 3.9 3.5 3.8 3.4
 Oklahoma 15.6 16.5 15.1 15.6
 Texas 131.9 149.9 118.6 139.1

Rocky Mountain 34.4 37.4 30.4 31.8
 Colorado 19.4 19.9 16.7 16.3
 Idaho 3.6 4.4 3.5 4.3
 Montana .6 1.2 .6 .6
 Utah 9.3 10.5 8.2 9.2
 Wyoming 1.5 1.4 1.4 1.4

Far West 245.4 253.8 206.3 216.2
 Alaska 1.5 1.7 1.5 1.4
 California 185.3 193.3 154.4 163.3
 Hawaii 1.4 1.2 1.3 1.1
 Nevada 5.2 5.1 5.0 4.9
 Oregon 21.7 21.2 19.0 18.5
 Washington 30.3 31.3 25.1 27.0

Puerto Rico 9.7 8.6 7.5 7.4
Other U.S. areas(3) 2.7 .2 .2 .2
Foreign(4) 0 0 0 0

 Percentage of total
 employment by nonbank
 U.S. affiliates

 Majority-
 owned
 All nonbank nonbank
 affiliates affiliates

 1997 1998 1997 1998

 Total(2) 39.7 40.1 43.2 43.7

New England 31.5 31.1 33.1 33.8
 Connecticut 30.0 32.6 29.6 33.3
 Maine 40.3 38.2 51.6 50.9
 Massachusetts 26.8 24.8 27.7 26.8
 New Hampshire 46.2 48.6 51.7 56.0
 Rhode Island 37.7 36.5 38.5 39.0
 Vermont 37.2 29.3 45.1 34.4

Mideast 31.2 30.6 34.1 34.0
 Delaware 39.8 33.7 41.6 41.3
 District of Columbia 4.5 5.0 6.8 6.3
 Maryland 24.2 23.5 31.8 30.7
 New Jersey 36.0 32.3 37.5 35.8
 New York 21.2 21.2 22.9 22.9
 Pennsylvania 45.6 48.2 46.5 51.0

Great Lakes 54.1 54.9 56.5 56.6
 Illinois 46.4 44.6 49.2 47.8
 Indiana 66.3 71.6 69.9 74.6
 Michigan 49.0 53.3 51.1 52.5
 Ohio 57.5 55.2 59.1 56.4
 Wisconsin 57.4 58.6 58.6 61.0

Plains 42.2 47.6 52.4 54.8
 Iowa 56.5 61.6 65.7 65.8
 Kansas 37.6 38.4 50.2 54.3
 Minnesota 32.8 42.4 45.1 45.6
 Missouri 49.5 52.1 55.3 58.6
 Nebraska 44.3 45.8 58.7 61.3
 North Dakota 40.5 59.3 45.5 61.7
 South Dakota 35.6 39.6 36.5 40.4

Southeast 45.9 45.2 50.0 49.2
 Alabama 64.7 63.1 69.0 70.5
 Arkansas 72.6 70.4 73.0 73.8
 Florida 19.3 20.1 23.6 25.2
 Georgia 43.9 44.5 46.9 46.9
 Kentucky 70.6 71.0 69.7 70.9
 Louisiana 36.0 36.7 40.9 41.1
 Mississippi 53.7 53.3 60.7 60.7
 North Carolina 51.9 50.7 55.1 53.3
 South Carolina 57.3 56.1 58.4 56.5
 Tennessee 58.8 55.9 62.9 59.3
 Virginia 32.5 32.1 37.7 36.6
 West Virginia 51.1 47.8 56.4 46.7

Southwest 36.0 37.1 42.3 43.8
 Arizona 26.0 26.2 31.2 31.2
 New Mexico 21.3 19.4 33.6 29.8
 Oklahoma 45.0 40.6 51.7 49.5
 Texas 37.6 39.3 43.5 45.6

Rocky Mountain 24.4 26.1 31.9 31.8
 Colorado 23.8 25.0 29.8 27.9
 Idaho 29.0 31.0 49.3 55.8
 Montana 13.3 17.4 21.4 13.0
 Utah 26.3 30.3 33.9 39.7
 Wyoming 21.1 17.9 26.9 23.3

Far West 30.9 30.5 31.8 31.9
 Alaska 16.5 16.0 17.6 14.7
 California 32.5 32.0 33.0 33.0
 Hawaii 2.8 2.6 3.0 2.7
 Nevada 19.6 18.3 25.4 23.4
 Oregon 41.4 38.6 45.5 42.9
 Washington 34.6 34.9 37.3 38.5

Puerto Rico 55.7 51.2 54.3 51.4
Other U.S. areas(3) 26.5 2.7 2.7 2.9
Foreign(4) 0 0 0 0

 Percentage of total
 manufacturing employment
 in the States(1)

 Majority-
 owned
 All nonbank nonbank
 affiliates affiliates

 1997 1998 1997 1998

 Total(2) 12.2 13.3 10.9 12.0

New England 11.2 12.2 10.3 11.5
 Connecticut 10.6 13.0 9.6 12.0
 Maine 15.7 15.3 14.0 13.9
 Massachusetts 10.5 10.8 9.7 10.3
 New Hampshire 14.8 17.2 14.0 16.6
 Rhode Island 9.5 10.2 9.3 9.8
 Vermont 8.2 7.6 7.5 6.9

Mideast 12.8 13.9 11.8 12.9
 Delaware 18.5 19.3 15.1 17.0
 District of Columbia 17.5 23.4 17.5 20.1
 Maryland 13.5 13.5 12.1 12.5
 New Jersey 18.7 18.8 17.6 17.6
 New York 9.5 10.9 8.7 9.9
 Pennsylvania 12.4 14.0 11.7 13.2

Great Lakes 11.7 14.1 10.5 12.7
 Illinois 11.8 13.3 10.7 11.9
 Indiana 13.7 18.1 12.6 16.4
 Michigan 10.1 15.2 8.7 13.4
 Ohio 13.8 14.5 12.3 12.8
 Wisconsin 7.9 8.9 7.4 8.4

Plains 9.4 10.3 8.6 9.4
 Iowa 9.1 9.0 8.9 8.5
 Kansas 8.9 10.0 7.9 9.0
 Minnesota 8.5 90.0 7.5 8.0
 Missouri 11.3 12.5 10.2 11.2
 Nebraska 8.4 9.0 7.9 8.4
 North Dakota 6.8 22.0 6.8 21.5
 South Dakota 7.7 8.3 7.5 7.9

Southeast 14.7 15.4 13.1 13.7
 Alabama 12.1 13.4 10.3 11.7
 Arkansas 10.7 11.3 9.4 9.8
 Florida 10.8 12.4 9.5 10.9
 Georgia 15.7 16.7 14.1 15.1
 Kentucky 22.0 22.8 17.4 18.2
 Louisiana 12.7 12.8 11.4 11.1
 Mississippi 5.4 5.6 4.6 4.8
 North Carolina 15.2 15.7 13.9 14.3
 South Carolina 19.8 20.5 18.8 19.1
 Tennessee 17.9 18.0 16.5 16.5
 Virginia 12.9 13.3 12 12.4
 West Virginia 19.4 18.8 15.7 15.0

Southwest 12.3 13.4 11.1 12.3
 Arizona 8.0 8.3 6.9 7.1
 New Mexico 9.8 8.6 9.6 8.4
 Oklahoma 9.5 9.8 9.2 9.3
 Texas 13.7 15.2 12.4 14.1

Rocky Mountain 8.9 9.5 7.9 8.1
 Colorado 11.2 11.5 9.6 9.4
 Idaho 5.4 6.6 5.3 6.4
 Montana 3.1 5.8 3.1 2.9
 Utah 7.8 8.4 6.9 7.4
 Wyoming 17.8 15.7 16.6 15.7

Far West 10.2 10.4 8.5 8.9
 Alaska 13.9 14.0 13.9 11.6
 California 10.2 10.6 8.5 8.9
 Hawaii 9.3 8.3 8.6 7.6
 Nevada 13.7 13.1 13.2 12.6
 Oregon 10.2 10.0 8.9 8.7
 Washington 9.2 9.3 7.6 8.0

Puerto Rico n.a. n.a. n.a. n.a
Other U.S. areas(3) n.a. n.a. n.a. n.a
Foreign(4) n.a. n.a. n.a. n.a

(1.) The data on employment in manufacturing used to calculate these shares for 1997 are from the Census Bureau's 1997 Economic Census; for 1998, the data are from the Census Bureau's County Business Patterns.

(2.) Total affiliate manufacturing employment and the shares of all-U.S.-business manufacturing employment accounted for by affiliates in this table differ from those shown in table 5 (see footnote 3 to table 5). For consistency with the coverage of the employment data for all U.S. manufacturing plants, U.S. affiliate employment in Puerto Rico, in "other U.S. areas," and in "foreign" was excluded from the U.S.-affiliate total when the percentage shares on this line were computed.

(3.) Consists of the U.S. Virgin Islands, Guam, American Samoa, and all other outlying U.S. areas.

(4.) Consists of employees of U.S. affiliates working abroad.

n.a. Not available.

South Carolina ranked fourth among States in terms of the affiliate share of total employment in manufacturing (20.5 percent), behind the District of Columbia (23.4 percent), Kentucky (22.8 percent), and North Dakota (22.0 percent). The high affiliate shares in the District of Columbia and North Dakota partly reflect very small manufacturing employment totals relative to the totals in most other States.(11)

In 1998, employment by affiliates increased the most in Michigan and Illinois. In Michigan, employment by affiliates increased 64,000, largely as a result of foreign acquisitions in the motor vehicles and motor vehicle parts industries. The affiliate share of private industry employment in Michigan increased from 4.4 percent to 6.0 percent, and the affiliate share of manufacturing employment increased from 10.1 percent to 15.2 percent. In Illinois, employment increased 38,000, partly as a result of acquisitions in the food service and petroleum industries; the affiliate share of employment increased from 4.4 percent to 5.0 percent. Employment by affiliates also increased substantially in the other Great Lakes States.

Employment by affiliates decreased substantially in Minnesota and in Hawaii. In Minnesota, where the affiliate share of employment decreased from 4.5 percent to 3.6 percent, selloffs of minority-owned affiliates more than accounted for the decrease; employment by majority-owned affiliates increased. In Hawaii, the decrease was also largely the result of selloffs; the affiliate share of employment decreased from 11.4 percent to 10.4 percent.

Trade in Goods

U.S. affiliates have a major presence in U.S. trade in goods: In most years since 1977, affiliates have accounted for 20-25 percent of U.S. exports of goods and for 30-35 percent of U.S. imports of goods; these shares are much higher than affiliates' shares of either gross product or employment (table 8). The relatively high shares in trade partly reflect the activity of wholesale trade affiliates, which have served as conduits for flows of goods between the United States and the foreign investing countries.(12) Affiliate trade in goods has been dominated by majority-owned affiliates: In the past decade, these affiliates have consistently accounted for more than 80 percent of affiliate exports and more than 90 percent of affiliate imports.

Table 8.--U.S. Trade in Goods by Nonbank U.S. Affiliates, 1977-98

 Millions of dollars

 U.S. exports of goods
 shipped by affiliates

 Of which: To the
 foreign parent
 Total group

 All nonbank affiliates:

1977 24,858 11,691
1978 32,169 16,570
1979 44,341 22,073
1980 52,199 20,983
1981 64,066 26,911
1982 60,236 25,024
1983 53,854 22,577
1984 58,186 27,072
1985 56,401 25,900
1986 49,560 21,873
1987 48,091 19,109
1988 69,541 26,425
1989 86,316 34,276
1990 92,308 37,764
1991 96,933 42,222
1992 103,925 48,767
1993 106,815 47,350
1994 120,683 51,147
1995 135,153 57,246
1996 140,886 60,831
1997(r) 141,305 63,025
1998(p) 150,836 57,386

Majority-owned nonbank affiliates:

1988 57,209 26,001
1989 72,413 33,778
1990 79,368 37,177
1991 85,254 41,373
1992 91,686 47,567
1993 94,329 46,241
1994 107,057 49,864
1985 121,277 55,842
1996 125,897 59,544
1997(r) 128,394 61,288
1998(p) 137, 912 55,874

 Millions of dollars

 U.S. imports of goods
 shipped by affiliates

 Of which: From
 the foreign par-
 Total ent group

 All nonbank affiliates:

1977 43,896 30,878
1978 56,567 39,466
1979 63,039 45,295
1980 75,803 47,010
1981 82,259 52,198
1982 84,290 51,915
1983 81,464 54,802
1984 100,489 70,451
1985 113,331 81,740
1986 125,732 93,418
1987 143,537 108,201
1988 155,533 118,362
1989 171,847 129,926
1990 182,936 137,458
1991 178,702 132,166
1992 184,464 137,799
1993 200,599 150,789
1994 232,362 174,641
1995 250,824 191,222
1996 268,673 197,656
1997(r) 264,924 202,355
1998(p) 289,679 203,526

Majority-owned nonbank affiliates:

1988 144,896 112,012
1989 158,792 122,899
1990 170,677 131,665
1991 169,362 128,143
1992 172,260 132,217
1993 186,369 144,698
1994 214,485 166,085
1985 232,250 182,148
1996 248,562 187,889
1997(r) 249,310 193,969
1998(p) 277,599 197,924

 U.S. exports of goods
 shipped by affiliates as a
 percentage of total U.S.
 exports of goods

 Of which: To the
 foreign parent
 Total group

 All nonbank affiliates:

1977 20.2 9.5
1978 22.1 11.4
1979 23.8 11.8
1980 23.1 9.3
1981 26.8 11.3
1982 27.8 11.6
1983 26.2 11.0
1984 26.0 12.1
1985 25.8 11.8
1986 21.9 9.7
1987 18.9 7.5
1988 21.5 8.2
1989 23.7 9.4
1990 23.5 9.6
1991 23.0 10.0
1992 23.2 10.9
1993 22.9 10.2
1994 23.5 10.0
1995 23.1 9.8
1996 22.5 9.7
1997(r) 20.5 9.1
1998(p) 22.1 8.4

Majority-owned nonbank affiliates:

1988 17.7 8.0
1989 19.9 9.3
1990 20.2 9.5
1991 20.2 9.8
1992 20.5 10.6
1993 20.3 9.9
1994 20.9 9.7
1985 20.7 9.5
1996 20.1 9.5
1997(r) 18.6 8.9
1998(p) 20.2 8.2

 U.S. imports of goods
 shipped by affiliates as a
 percentage of total U.S.
 imports of goods

 Of which: From
 the foreign par-
 Total ent group

 All nonbank affiliates:

1977 29.0 20.4
1978 32.1 22.4
1979 30.0 21.5
1980 30.9 19.2
1981 31.5 20.0
1982 34.6 21.3
1983 31.6 21.2
1984 30.4 21.3
1985 33.7 24.3
1986 34.4 25.5
1987 35.3 26.6
1988 35.2 26.8
1989 36.3 27.4
1990 36.9 27.7
1991 36.6 27.1
1992 34.6 25.9
1993 34.5 26.0
1994 35.0 26.3
1995 33.7 25.7
1996 33.8 24.9
1997(r) 30.5 23.3
1998(p) 31.8 22.3

Majority-owned nonbank affiliates:

1988 32.8 25.3
1989 33.5 25.9
1990 34.4 26.5
1991 34.7 26.2
1992 32.3 24.8
1993 32.1 24.9
1994 32.3 25.0
1985 31.2 24.5
1996 31.3 23.6
1997(r) 28.7 22.3
1998(p) 30.4 21.7

(p) Preliminary.

(r) Revised.

NOTE.--The data on total U.S. exports and imports of goods that were used to calculate the shares shown in this table are Census-basis data published in BEA's international transactions accounts (see table 2, lines A1 an A9, in Douglas B. Weinberg, "U.S. International Transactions, First Quarter 2000," SURVEY OF CURRENT BUSINESS 80 (July 2000): 98-99).

Much of the trade in goods by affiliates--about 40 percent of exports and 70 percent of imports--is intrafirm trade (that is, trade between the affiliates and their foreign parents or other member companies of their foreign parent groups). In most years, U.S.-affiliate intrafirm trade has accounted for 8-12 percent of U.S. exports and for 20-28 percent of U.S. imports. Almost all of the intrafirm trade of affiliates has been trade by majority-owned affiliates.

Exports

In 1998, exports of goods by U.S. affiliates increased 7 percent, to $150.8 billion, as a result of new foreign investments. In contrast, total U.S. exports of goods decreased 1 percent, reflecting a reduction in foreign demand that was associated with troubled economic conditions overseas, particularly in Asia. Thus, the affiliate share of U.S. exports of goods increased from 20.5 percent in 1997 to 22.1 percent in 1998.

The increase in affiliate exports in 1998 was more than accounted for by foreign acquisitions of a few large U.S. manufacturing companies; exports by existing U.S. affiliates decreased, reflecting the troubled conditions in Asia, which has been a major market for U.S.-affiliate exports.(13) Because the acquired affiliates had little or no established trade with their new foreign parent companies, foreign acquisitions did not have a comparable impact on intrafirm exports by affiliates. In fact, intrafirm exports by affiliates decreased 9 percent in 1998, and the share of these exports in U.S. exports of goods decreased from 9.1 percent to 8.4 percent.

By country of UBO, exports by German-owned affiliates more than doubled, largely because of German acquisitions of U.S. companies (table 9). As a result, the share of exports by German-owned affiliates in affiliate exports of goods increased from 10.0 percent to 19.2 percent, and their share in total U.S. exports of goods increased from 2.0 percent to 4.2 percent. Intrafirm exports by German-owned affiliates, which were largely unaffected by the acquisitions, increased 13 percent, reflecting expanded activity by existing affiliates.

Table 9.--U.S. Trade in Goods of Nonbank U.S. Affiliates by Transactor and Selected Country of Ultimate Beneficial Owner, 1996-98

 U.S. exports of goods
 shipped by affiliates

 Millions of dollars

 1996 1997 1998

 Exports, total:

 All countries 140,886 141,305 150,836

Canada 5,920 8,155 8,118
France 17,838 14,112 15,140
Germany 12,785 14,114 28,987
Netherlands 4,719 4,713 4,124
Sweden 3,826 3,665 3,880

Switzerland 6,468 5,857 5,640
United Kingdom 13,137 14,461 16,700
Japan 54,490 52,524 45,989
Korea, Republic of 3,978 5,064 3,857
Other 17,725 18,640 18,401

 Exports to the foreign parent
 group:

 All countries 60,831 63,025 57,386

Canada 2,806 2,993 2,851
France 3,638 2,959 3,053
Germany 3,714 5,263 5,941
Netherlands 2,185 2,303 1,980
Sweden 1,374 1,785 1,493

Switzerland 2,359 2,347 2,702
United Kingdom 2,687 3,408 3,446
Japan 34,108 31,841 26,969
Korea, Republic Of 45,988 3,667 2,274
Other 6,362 6,459 6,677

 Exports to others:

 All countries 80,055 78,280 93,450

Canada 3,114 5,163 5,267
France 14,201 11,153 12,086
Germany 9,071 8,852 23,046
Netherlands 2,534 2,410 2,144
Sweden 2,452 1,880 2,387

Switzerland 4,108 3,510 2,938
United Kingdom 10,450 11,053 13,254
Japan 20,383 20,683 19,020
Korea 2,380 1,397 1,583
Other 11,362 12,179 11,725

Imports, total:

 All countries 268,673 264,924 289,679

Canada 16,287 15,333 15,484
France 13,123 12,847 12,649
Germany 30,237 32,206 55,246
Netherlands 9,266 11,435 10,842
Sweden 5,058 5,510 6,562

Switzerland 7,960 8,633 6,815
United Kingdom 13,573 15,309 15,555
Japan 126,424 120,693 122,315
Korea, Republic of 10,801 9,229 11,001
Other 35,944 35,729 33,210

Imports from the foreign parent
 group:

 All countries 197,656 202,355 203,526

Canada 12,133 13,092 13,204
France 7,314 6,987 6,162
Germany 23,320 25,993 29,305
Netherlands 5,034 6,512 7,391
Sweden 4,561 5,130 5,866
Switzerland 5,832 5,368 5,651
United Kingdom 7,006 9,313 7,596
Japan 98,721 96,214 95,393
Korea, Republic of 8,297 7,759 9,664
Other 25,438 25,987 23,294

Imports from others:

 All countries 71,016 62,569 86,154

Canada 4,154 2,241 2,280
France 5,809 5,860 6,487
Germany 6,916 6,213 25,940
Netherlands 4,232 4,923 3,451
Sweden 497 380 697
Switzerland 2,128 1,265 1,164
United Kingdom 6,567 5,996 7,960
Japan 27,703 24,479 26,922
Korea, Republic of 2,504 1,470 1,337
Other 10,506 9,742 9,916

 U.S. exports of goods
 shipped by affiliates

 Percentage of all-
 countries total

 1996 1997 1998

 Exports, total:

 All countries 100.0 100.0 100.0

Canada 4.2 5.8 5.4
France 12.7 10.0 10.0
Germany 9.1 10.0 19.2
Netherlands 3.3 3.3 2.7
Sweden 2.7 2.6 2.6

Switzerland 4.6 4.1 3.7
United Kingdom 9.3 10.2 11.1
Japan 38.7 37.2 30.5
Korea, Republic of 2.8 3.6 2.6
Other 12.6 13.2 12.2

 Exports to the foreign parent
 group:

 All countries 100.0 100.0 100.0

Canada 4.6 4.7 5.0
France 6.0 4.7 5.3
Germany 6.1 8.4 10.4
Netherlands 3.6 3.7 3.5
Sweden 2.3 2.8 2.6

Switzerland 3.9 3.7 4.7
United Kingdom 4.4 5.4 6.0
Japan 56.1 50.5 47.0
Korea, Republic Of 2.6 5.8 4.0
Other 10.5 10.2 11.6

 Exports to others:

 All countries 100.0 100.0 100.0

Canada 3.9 6.6 5.6
France 17.7 14.2 12.9
Germany 11.3 11.3 24.7
Netherlands 3.2 3.1 2.3
Sweden 3.1 2.4 2.6

Switzerland 5.1 4.5 3.1
United Kingdom 13.1 14.1 14.2
Japan 25.5 26.4 20.4
Korea 3.0 1.8 1.7
Other 14.2 15.6 12.5

Imports, total:

 All countries 100.0 100.0 100.0

Canada 6.1 5.8 5.3
France 4.9 4.8 4.4
Germany 11.3 12.2 19.1
Netherlands 3.4 4.3 3.7
Sweden 1.9 2.1 2.3

Switzerland 3.0 2.5 2.4
United Kingdom 5.1 5.8 5.4
Japan 47.1 45.6 42.2
Korea, Republic of 4.0 3.5 3.8
Other 13.4 13.5 11.5

Imports from the foreign parent
 group:

 All countries 100.0 100.0 100.0

Canada 6.1 6.5 6.5
France 3.7 3.5 3.0
Germany 11.8 12.8 14.4
Netherlands 2.5 3.2 3.8
Sweden 2.3 2.5 2.9
Switzerland 3.0 2.7 2.8
United Kingdom 3.5 4.6 3.7
Japan 49.9 47.5 46.9
Korea, Republic of 4.2 3.8 4.7
Other 12.9 12.8 11.4

Imports from others:

 All countries 100.0 100.0 100.0

Canada 5.8 3.6 2.6
France 8.2 9.4 7.5
Germany 9.7 9.9 30.1
Netherlands 6.0 7.9 4.0
Sweden .7 .6 .8
Switzerland 3.0 2.0 1.4
United Kingdom 9.2 9.6 9.2
Japan 39.0 39.1 31.2
Korea, Republic of 3.5 2.3 1.6
Other 14.8 15.6 11.5

 U.S. exports of goods
 shipped by affiliates

 Percentage of total
 U.S. exports of
 goods(1)

 1996 1997 1998

 Exports, total:

 All countries 22.5 20.5 22.1

Canada .9 1.2 1.2
France 2.9 2.0 2.2
Germany 2.0 2.0 4.2
Netherlands .8 .7 .6
Sweden .6 .5 .6

Switzerland 1.0 .8 .8
United Kingdom 2.1 2.1 2.4
Japan 8.7 7.6 6.7
Korea, Republic of .6 .7 .6
Other 2.8 2.7 2.7

 Exports to the foreign parent
 group:

 All countries 9.7 9.1 8.4

Canada .4 .4 .4
France .6 .4 .4
Germany .6 .8 .9
Netherlands .3 .3 .3
Sweden .2 .3 .2

Switzerland .4 .3 .4
United Kingdom .4 .5 .5
Japan 5.5 4.6 4.0
Korea, Republic Of .3 .5 .3
Other 1.0 .9 1.0

 Exports to others:

 All countries 12.8 11.4 13.7

Canada .5 .7 .8
France 2.3 1.6 1.8
Germany 1.5 1.3 3.4
Netherlands .4 .3 .3
Sweden .4 .3 .3

Switzerland .7 .5 .4
United Kingdom 1.7 1.6 1.9
Japan 3.3 3.0 2.8
Korea .4 .2 .2
Other 1.8 1.8 1.7

Imports, total:

 All countries 33.8 30.5 31.8

Canada 2.0 18.0 1.7
France 1.7 1.5 1.4
Germany 3.8 3.7 6.1
Netherlands 1.2 1.3 1.2
Sweden .6 .6 .7

Switzerland 1.0 .8 .7
United Kingdom 1.7 1.8 1.7
Japan 15.9 13.9 13.4
Korea, Republic of 1.4 1.1 1.2
Other 4.5 4.1 3.6

Imports from the foreign parent
 group:

 All countries 24.9 23.3 22.3

Canada 1.5 1.5 1.4
France .9 .8 .7
Germany 2.9 3.0 3.2
Netherlands .6 .7 .8
Sweden .6 .6 .6
Switzerland .7 .6 .6
United Kingdom .9 1.1 .8
Japan 12.4 11.1 10.5
Korea, Republic of 1.0 .9 1.1
Other 3.2 3.0 2.6

Imports from others:

 All countries 8.9 7.2 9.4

Canada .5 .3 .3
France .7 .7 .7
Germany .9 .7 2.8
Netherlands .5 .6 .4
Sweden .1 (*) .1
Switzerland .3 .1 .1
United Kingdom .8 .7 .9
Japan 3.5 2.8 3.0
Korea, Republic of .3 .2 .1
Other 1.3 1.1 1.1

 Addendum: Percent
 change in affiliate
 exports, 1997-98

 Exports, total:

 All countries 6.7

Canada -.5
France 7.3
Germany 105.4
Netherlands -12.5
Sweden 5.9

Switzerland -3.7
United Kingdom 15.5
Japan -12.4
Korea, Republic of -23.8
Other -1.3

 Exports to the foreign parent
 group:

 All countries -8.9

Canada -4.7
France 3.2
Germany 12.9
Netherlands -14.0
Sweden -16.4

Switzerland 15.1
United Kingdom 1.1
Japan -15.3
Korea, Republic Of -38.0
Other 3.4

 Exports to others:

 All countries 19.4

Canada 2.0
France 8.4
Germany 160.3
Netherlands -11.0
Sweden 27.0

Switzerland -16.3
United Kingdom 19.9
Japan -8.0
Korea 13.3
Other -3.7

Imports, total:

 All countries 9.3

Canada 1.0
France -1.5
Germany 71.5
Netherlands -5.2
Sweden 19.1

Switzerland 2.7
United Kingdom 1.6
Japan 1.3
Korea, Republic of 19.2
Other -7.1

Imports from the foreign parent
 group:

 All countries .6

Canada .9
France -11.8
Germany 12.7
Netherlands 13.5
Sweden 14.3
Switzerland 5.3
United Kingdom -18.4
Japan -.9
Korea, Republic of 24.6
Other -10.4

Imports from others:

 All countries 37.7

Canada 1.7
France 10.7
Germany 317.1
Netherlands -29.9
Sweden 83.4
Switzerland -8.0
United Kingdom 32.8
Japan 10.0
Korea, Republic of -9.0
Other 1.8

(*) Less than 0.05 percent.

(1.) See the note to table 8.

Acquisitions of U.S. companies were also the major factor behind a 15-percent increase in exports by British-owned affiliates. These acquisitions had virtually no impact on intrafirm exports by British-owned affiliates, which increased only 1 percent.

In contrast, exports by Japanese-owned affiliates decreased 12 percent, and exports by Korean-owned affiliates decreased 24 percent. These reductions, which mainly took the form of reduced intrafirm exports by wholesale trade affiliates, can be attributed to a falloff in Japanese and Korean demand for U.S. goods that resulted from the 1998 economic downturn in the two countries and the accompanying depreciation of their currencies against the U.S. dollar.(14) The decrease in intrafirm exports by Japanese-owned and Korean-owned affiliates more than accounted for the overall decrease in U.S.-affiliate intrafirm exports.

Imports

In 1998, imports of goods by U.S. affiliates increased 9 percent, to $289.7 billion, mainly as a result of foreign acquisitions of U.S. manufacturing companies. Total U.S. imports of goods increased 5 percent. Thus, the affiliate share of U.S. imports of goods increased from 30,4 percent in 1997 to 31.8 percent in 1998.

As with exports, the imports of companies acquired in 1998 boosted the imports of U.S. affiliates from unrelated parties but had little effect on intrafirm imports: Imports by affiliates from unrelated parties increased more than a third, while intrafirm imports by affiliates increased less than 1 percent. The share of intrafirm imports by affiliates in U.S. imports of goods decreased from 23.2 percent in 1997 to 22.3 percent in 1998.

By country of ownership, imports by German-owned affiliates increased 72 percent; the increase mainly resulted from German acquisitions of U.S. companies, which expanded imports from unrelated parties. Intrafirm imports by German-owned affiliates increased 13 percent, mainly reflecting increased imports by existing affiliates in the motor vehicle manufacturing and motor vehicle wholesale trade industries.

Among the other investing countries, imports by Korean-owned affiliates (which have predominantly been by wholesale trade affiliates) increased 19 percent in 1998, reflecting increased imports by existing wholesale trade affiliates. Imports by Swedish-owned affiliates also increased 19 percent, reflecting expanded imports by existing affiliates. In contrast, imports by Netherlands-owned affiliates decreased, partly as a result of selloffs. For British-owned affiliates, a substantial increase in imports from unrelated parties that resulted from new acquisitions was largely offset by reduced intrafirm imports by existing affiliates.

Tables 10 and 11 follow.

Table 10.1--Selected Data of Nonbank US Affiliates by Industry of Affiliate, 1997

 Millions of dollars

 Gross
 Total property,
 assets plant, and
 equipment

 All industries 3,071,483 877,588

Manufacturing 691,975 400,182

 Food 44,925 20,395
 Beverages and tobacco products 27,378 5,768
 Textiles, apparel, and
 leather products 8,462 5,820
 Wood products 1,622 1,134
 Paper 19,870 16,258
 Printing and related support
 activities 5,398 3,851
 Petroleum and coal products 65,788 81,359

 Chemicals 192,552 93,870
 Basic chemicals 43,959 34,426
 Resins and synthetic rubber,
 fibers, and filaments 23,004 14,221
 Pharmaceuticals and medicines 78,774 25,015
 Soap, cleaning compounds,
 and toilet preparations 20,959 7,418
 Other 25,856 12,790

 Plastics and rubber products 21,105 16,722
 Nonmetallic mineral products 34,305 26,687
 Primary and fabricated metals 69,215 40,080
 Primary metals 32,920 26,485
 Fabricated metal products 36,295 13,595

 Machinery 41,787 14,530
 Agricultural, construction,
 and mining machinery 10,971 2,956
 Industrial machinery 4,992 2,057
 Other 25,825 9,517

 Computers and electronic products 67,322 29,797
 Computer and peripheral
 equipment 8,168 2,157
 Communications equipment 16,651 6,149
 Audio and video equipment (D) (D)
 Semiconductors and other
 electronic components 16,866 11,435
 Navigational, measuring,
 and other instruments 6,790 2,200
 Magnetic and optical media (D) (D)

 Electrical equipment,
 appliances, and components 26,425 11,817

 Transportation equipment 51,034 26,692
 Motor vehicles, bodies and
 trailers, and parts 45,901 25,155
 Other 5,133 1,537
 Furniture and related products 1,327 537
 Miscellaneous manufacturing 13,461 4,855

Wholesale trade 277,453 100,507
 Motor vehicles and motor vehicle
 parts and supplies 92,444 50,635
 Professional and commercial
 equipment and supplies 21,346 7,166
 Electrical goods 29,913 7,838
 Other durable goods 50,364 11,836
 Petroleum and petroleum products 24,988 7,815
 Other nondurable goods 58,399 15,218

Retail trade 49,757 31,769
 Food and beverage stores 28,992 23,052
 Other 20,766 8,717

Information 143,603 64,687
 Publishing industries 98,830 5,150
 Motion picture and sound
 recording industries 24,343 5,521
 Broadcasting and
 telecommunications 77,985 52,728
 Broadcasting, cable networks,
 and program distribution (D) 3,248
 Telecommunications (D) 49,480
 Information services and data
 processing services 2,445 1,188

Finance (except depository
 institutions) and insurance 1,553,681 38,563
 Finance, except depository
 institutions 849,234 8,311
 Insurance carriers and related
 activities 704,447 30,252

Real estate and rental and leasing 116,891 94,385
 Real estate 105,549 88,251
 Rental and leasing (except
 real estate) 11,342 6,134

Professional, scientific, and
 technical services 18,790 4,735
 Architectural, engineering,
 and related services 3,535 1,283
 Computer systems design and
 related services 5,805 1,689
 Management, scientific, and
 technical consulting 1,426 114
 Other 8,024 1,649

Other industries 219,334 142,841
 Agriculture, forestry,
 fishing, and hunting 4,620 2,897
 Mining 58,498 49,459
 Utilities 16,654 10,152
 Construction 13,519 5,889
 Transportation and warehousing 35,737 29,496
 Management of nonbank
 companies and enterprises 15,968 72
 Administration, support, and
 waste management 13,271 5,697
 Health care and social assistance 12,527 3,573
 Accommodation and food services 33,453 28,335
 Accommodation 27,822 25,270
 Food services and drinking
 places 5,631 3,065
 Miscellaneous services 15,096 7,272

 Millions of dollars

 Expend-
 itures for
 property
 plant,
 and Sales
 equipment

 All industries 113,262 1,726,344

Manufacturing 42,468 684,349

 Food 1,585 48,444
 Beverages and tobacco products 662 13,889
 Textiles, apparel, and
 leather products 391 9,320
 Wood products 91 2,061
 Paper 967 16,857
 Printing and related support
 activities 376 5,468
 Petroleum and coal products 6,078 64,399

 Chemicals 10,244 143,138
 Basic chemicals 3,972 35,110
 Resins and synthetic rubber,
 fibers, and filaments 1,305 18,002
 Pharmaceuticals and medicines 2,784 49,906
 Soap, cleaning compounds,
 and toilet preparations 756 20,105
 Other 1,428 20,016

 Plastics and rubber products 1,531 24,037
 Nonmetallic mineral products 2,977 29,698
 Primary and fabricated metals 4,519 67,388
 Primary metals 3,261 39,113
 Fabricated metal products 1,258 23,275

 Machinery 1,603 49,843
 Agricultural, construction,
 and mining machinery 354 11,108
 Industrial machinery 226 5,916
 Other 1,023 32,820

 Computers and electronic products 5,639 89,304
 Computer and peripheral
 equipment (D) 14,828
 Communications equipment 967 25,912
 Audio and video equipment (D) (D)
 Semiconductors and other
 electronic components 3,172 17,471
 Navigational, measuring,
 and other instruments 215 6,227
 Magnetic and optical media 411 (D)

 Electrical equipment,
 appliances, and components 1,348 29,531

 Transportation equipment 3,669 75,672
 Motor vehicles, bodies and
 trailers, and parts 3,441 70,467
 Other 228 5,206
 Furniture and related products 77 2,379
 Miscellaneous manufacturing 511 13,920

Wholesale trade 26,016 498,101
 Motor vehicles and motor vehicle
 parts and supplies 17,910 117,520
 Professional and commercial
 equipment and supplies 2,070 35,365
 Electrical goods 1,720 48,439
 Other durable goods 1,463 94,230
 Petroleum and petroleum products 739 69,762
 Other nondurable goods 2,115 132,784

Retail trade 4,232 96,218
 Food and beverage stores 2,890 67,607
 Other 1,342 28,611

Information 9,747 81,011
 Publishing industries 710 19,936
 Motion picture and sound
 recording industries 459 13,974
 Broadcasting and
 telecommunications 8,414 44,240
 Broadcasting, cable networks,
 and program distribution 606 8,956
 Telecommunications 7,807 35,284
 Information services and data
 processing services 164 2,862

Finance (except depository
 institutions) and insurance 7,753 174,764
 Finance, except depository
 institutions 2,817 73,383
 Insurance carriers and related
 activities 4,937 101,381

Real estate and rental and leasing 7,800 20,419
 Real estate 6,973 16,833
 Rental and leasing (except
 real estate) 827 3,387

Professional, scientific, and
 technical services 611 16,515
 Architectural, engineering,
 and related services 143 4,719
 Computer systems design and
 related services 270 4,772
 Management, scientific, and
 technical consulting 8 596
 Other 189 6,429

Other industries 14,635 154,966
 Agriculture, forestry,
 fishing, and hunting 341 2,252
 Mining 5,498 24,163
 Utilities 730 27,256
 Construction 1,037 23,463
 Transportation and warehousing 3,031 32,904
 Management of nonbank
 companies and enterprises 16 11
 Administration, support, and
 waste management 1,120 15,507
 Health care and social assistance 458 7,867
 Accommodation and food services 18,261 15,760
 Accommodation 1,351 8,730
 Food services and drinking
 places 475 7,031
 Miscellaneous services 579 5,781

 Millions of dollars

 Net Gross
 income product

 All industries 40,924 389,432

Manufacturing 16,822 190,635

 Food 129 110,921
 Beverages and tobacco products 579 54,771
 Textiles, apparel, and
 leather products 196 3,264
 Wood products 89 582
 Paper 32 5,077
 Printing and related support
 activities -94 2,057
 Petroleum and coal products 3,921 23,476

 Chemicals 4,150 41,199
 Basic chemicals 558 9,567
 Resins and synthetic rubber,
 fibers, and filaments 675 5,047
 Pharmaceuticals and medicines 1,300 16,371
 Soap, cleaning compounds,
 and toilet preparations 1,215 4,772
 Other 400 5,443

 Plastics and rubber products 182 7,772
 Nonmetallic mineral products 2,202 12,005
 Primary and fabricated metals 1,822 16,800
 Primary metals 727 8,526
 Fabricated metal products 1,095 8,275

 Machinery 891 13,856
 Agricultural, construction,
 and mining machinery 245 2,623
 Industrial machinery 111 1,805
 Other 535 9,429

 Computers and electronic products -756 18,177
 Computer and peripheral
 equipment -1,183 1,048
 Communications equipment 628 6,073
 Audio and video equipment (D) 3,608
 Semiconductors and other
 electronic components -216 4,107
 Navigational, measuring,
 and other instruments 192 2,500
 Magnetic and optical media (D) 8431

 Electrical equipment,
 appliances, and components 1,049 95,341

 Transportation equipment 1,757 14,694
 Motor vehicles, bodies and
 trailers, and parts 1,674 13,070
 Other 82 1,624
 Furniture and related products 81 684
 Miscellaneous manufacturing 591 4,888

Wholesale trade 4,098 49,375
 Motor vehicles and motor vehicle
 parts and supplies 1,564 11,909
 Professional and commercial
 equipment and supplies -614 4,499
 Electrical goods 98 5,195
 Other durable goods 102 9,274
 Petroleum and petroleum products 484 5,484
 Other nondurable goods 2,465 13,014

Retail trade 1,256 24,960
 Food and beverage stores 1,171 17,685
 Other 85 7,275

Information 2,168 27,838
 Publishing industries 203 7,959
 Motion picture and sound
 recording industries -14 24,941
 Broadcasting and
 telecommunications 1,913 16,267
 Broadcasting, cable networks,
 and program distribution -403 1,496
 Telecommunications 2,317 14,770
 Information services and data
 processing services 56 1,119

Finance (except depository
 institutions) and insurance 11,405 27,820
 Finance, except depository
 institutions 2,420 10,560
 Insurance carriers and related
 activities 8,985 17,260

Real estate and rental and leasing 967 8,987
 Real estate 740 7,482
 Rental and leasing (except
 real estate) 228 1,505

Professional, scientific, and
 technical services -424 6,347
 Architectural, engineering,
 and related services 17 1,585
 Computer systems design and
 related services -531 1,844
 Management, scientific, and
 technical consulting 141 445
 Other -52 2,472

Other industries 4,641 63,469
 Agriculture, forestry,
 fishing, and hunting 176 717
 Mining 969 10,964
 Utilities -9 2,196
 Construction -235 4,190
 Transportation and warehousing 1,624 12,654
 Management of nonbank
 companies and enterprises 2,033 -322
 Administration, support, and
 waste management 42 8,975
 Health care and social assistance -255 3,716
 Accommodation and food services 527 8,581
 Accommodation 543 4,965
 Food services and drinking
 places -16 3,615
 Miscellaneous services -230 1,798

 Millions of
 dollars

 Thou-
 Com- sands of
 pensation employees
 of employees

 All industries 233,482 5,201.9

Manufacturing 114,560 2,268.0

 Food 8,680 156.3
 Beverages and tobacco products 1,892 32.1
 Textiles, apparel, and
 leather products 2,321 756.5
 Wood products 379 10.7
 Paper 3,376 63.3
 Printing and related support
 activities 1,699 37.8
 Petroleum and coal products 4,034 51.6

 Chemicals 25,557 394.6
 Basic chemicals 5,389 80.5
 Resins and synthetic rubber,
 fibers, and filaments 2,914 48.3
 Pharmaceuticals and medicines 10,831 145.5
 Soap, cleaning compounds,
 and toilet preparations 3,231 57.7
 Other 3,191 62.6

 Plastics and rubber products 5,605 125.2
 Nonmetallic mineral products 6,509 134.3
 Primary and fabricated metals 11,063 226.0
 Primary metals 5,399 94.4
 Fabricated metal products 5,663 131.6

 Machinery 10,336 217.8
 Agricultural, construction,
 and mining machinery 1,729 42.3
 Industrial machinery 1,336 24.5
 Other 7,272 151.0

 Computers and electronic products 14,272 266.0
 Computer and peripheral
 equipment 1,468 29.8
 Communications equipment 4,160 79.4
 Audio and video equipment 2,972 40.5
 Semiconductors and other
 electronic components 3,367 65.8
 Navigational, measuring,
 and other instruments 1,866 34.4
 Magnetic and optical media 450 16.1

 Electrical equipment,
 appliances, and components 6,831 162.1

 Transportation equipment 10,106 215.6
 Motor vehicles, bodies and
 trailers, and parts 8,876 187.7
 Other 1,229 27.9
 Furniture and related products 494 16.1
 Miscellaneous manufacturing 3,406 71.1

Wholesale trade 25,060 509.7
 Motor vehicles and motor vehicle
 parts and supplies 4,803 88.3
 Professional and commercial
 equipment and supplies 3,584 71.3
 Electrical goods 3,353 70.1
 Other durable goods 5,916 117.3
 Petroleum and petroleum products 903 13.6
 Other nondurable goods 6,502 149.1

Retail trade 14,326 683.6
 Food and beverage stores 9,823 472.6
 Other 4,504 211.1

Information 15242 292.1
 Publishing industries 5,375 99.8
 Motion picture and sound
 recording industries 2,100 42.9
 Broadcasting and
 telecommunications 7,048 137.2
 Broadcasting, cable networks,
 and program distribution 967 16.6
 Telecommunications 6,981 120.7
 Information services and data
 processing services 720 12.1

Finance (except depository
 institutions) and insurance 21,381 225.1
 Finance, except depository
 institutions 10,310 59.2
 Insurance carriers and related
 activities 11,071 165.9

Real estate and rental and leasing 1,654 39.8
 Real estate 1,139 26.7
 Rental and leasing (except
 real estate) 515 13.1

Professional, scientific, and
 technical services 5,955 85.1
 Architectural, engineering,
 and related services 1,410 26.4
 Computer systems design and
 related services 1,942 24.7
 Management, scientific, and
 technical consulting 289 3.1
 Other 2,313 30.9

Other industries 35,304 1,108.6
 Agriculture, forestry,
 fishing, and hunting 416 12.2
 Mining 4,628 73.7
 Utilities 677 11.8
 Construction 3,837 73.8
 Transportation and warehousing 8,076 205.3
 Management of nonbank
 companies and enterprises 31 .6
 Administration, support, and
 waste management 7,758 280.8
 Health care and social assistance 2,884 104.2
 Accommodation and food services 5,527 275.9
 Accommodation 2,538 114.9
 Food services and drinking
 places 2,988 161.0
 Miscellaneous services 1,471 70.3

 Millions of dollars

 U.S. exports U.S. imports
 of goods of goods
 shipped by shipped to
 affiliates affiliates

 All industries 141,305 26,924

Manufacturing 71,251 10,242

 Food 2,846 2,712
 Beverages and tobacco products 1,632 1,206
 Textiles, apparel, and
 leather products 460 618
 Wood products 244 265
 Paper 1,740 1,052
 Printing and related support
 activities 143 235
 Petroleum and coal products 2,669 10,882

 Chemicals 15,443 16,257
 Basic chemicals 4,911 3,865
 Resins and synthetic rubber,
 fibers, and filaments 2,820 1,737
 Pharmaceuticals and medicines 4,002 7,710
 Soap, cleaning compounds,
 and toilet preparations 918 529
 Other 2,792 2,417

 Plastics and rubber products 2,554 3,679
 Nonmetallic mineral products 902 1,550
 Primary and fabricated metals 5,236 9.189
 Primary metals 3,183 6,393
 Fabricated metal products 2,053 2,795

 Machinery 8,698 6,974
 Agricultural, construction,
 and mining machinery 2,064 2,270
 Industrial machinery 1,397 913
 Other 5,238 3,791

 Computers and electronic products 14,298 27,750
 Computer and peripheral
 equipment 1,476 4,623
 Communications equipment 4,570 6,751
 Audio and video equipment (D) (D)
 Semiconductors and other
 electronic components 2,848 6,057
 Navigational, measuring,
 and other instruments (D) 500
 Magnetic and optical media 342 (D)

 Electrical equipment,
 appliances, and components 4,664 3,239

 Transportation equipment 7,930 18,430
 Motor vehicles, bodies and
 trailers, and parts 6,881 17,730
 Other 1,049 700
 Furniture and related products 84 56
 Miscellaneous manufacturing 1,767 1,148

Wholesale trade 62,222 151,005
 Motor vehicles and motor vehicle
 parts and supplies 4,816 49,781
 Professional and commercial
 equipment and supplies 2,053 15,324
 Electrical goods 4,924 25,580
 Other durable goods 14,684 28,652
 Petroleum and petroleum products 5,902 7,196
 Other nondurable goods 29,843 24,472

Retail trade 1,791 4,006
 Food and beverage stores 13 363
 Other 1,778 3,644

Information 1,035 338
 Publishing industries 806 252
 Motion picture and sound
 recording industries 224 (D)
 Broadcasting and
 telecommunications 1 (D)
 Broadcasting, cable networks,
 and program distribution 0 0
 Telecommunications 1 (D)
 Information services and data
 processing services 4 0

Finance (except depository
 institutions) and insurance (D) (D)
 Finance, except depository
 institutions (D) (D)
 Insurance carriers and related
 activities 0 0

Real estate and rental and leasing 25 (D)
 Real estate (D) (D)
 Rental and leasing (except
 real estate) (D) (D)

Professional, scientific, and
 technical services (D) 323
 Architectural, engineering,
 and related services 138 105
 Computer systems design and
 related services 124 (D)
 Management, scientific, and
 technical consulting (D) (*)
 Other 32 (D)

Other industries 4,623 3,655
 Agriculture, forestry,
 fishing, and hunting 282 90
 Mining 3,859 786
 Utilities (D) 2,299
 Construction 148 (D)
 Transportation and warehousing 157 370
 Management of nonbank
 companies and enterprises (*) 1
 Administration, support, and
 waste management 3 3
 Health care and social assistance (D) (D)
 Accommodation and food services (*) 5
 Accommodation (*) 5
 Food services and drinking
 places 0 0
 Miscellaneous services (D) 33

(*) Less than $500,000

(D) Suppressed to avoid disclosure of data of individual companies

NOTES--Size ranges are given in employment cells that are suppressed The size ranges are: A---1 to 499;

F--500 to 999:G-1000 to 2,499; H--2,500 to 4,999; I--5,000 to 9,999; J--10,000 to 24,999; K--25,000 to 49,999; L--50,000 to 99,999: M--100,000 or more

Table 10.2--Selected Data of Nonbank US Affiliates by Industry of Affiliate, 1998

 Millions of dollars

 Gross
 Total property,
 assets plant, and
 equipment

 All industries 3,525,885 984,927

Manufacturing 878,864 506,085

 Food 44,315 21,230
 Beverages and tobacco products 27,647 6,426
 Textiles, apparel, and
 leather products 8,087 5,562
 Wood products 1,718 1,212
 Paper 28,194 19,412
 Printing and related
 support activities 5,822 4,340
 Petroleum and coal products 108,430 123,087

 Chemicals 199,557 95,562
 Basic chemicals 45,587 36,826
 Resins and synthetic rubber,
 fibers, and filaments 22,238 12,429
 Pharmaceuticals and medicines 84,579 26,291
 Soap, cleaning compounds,
 and toilet preparations 21,460 7,370
 Other 25,693 12,647

 Plastics and rubber products 24,562 19,007
 Nonmetallic mineral products 37,397 28,151
 Primary and fabricated metals 66,493 42,093
 Primary metals 37,041 30,510
 Fabricated metal products 29,452 11,583

 Machinery 42,770 15,285
 Agricultural, construction,
 and mining machinery 9,271 2,597
 Industrial machinery 4,920 2,242
 Other 28,580 10,446

 Computers and electronic products 81,604 34,017
 Computer and peripheral
 equipment 9,869 3,118
 Communications equipment 23,760 6,551
 Audio and video equipment (D) (D)
 Semiconductors and other
 electronic components 19,708 13,585
 Navigational, measuring,
 and other instruments 8,767 2,405
 Magnetic and optical media (D) (D)

 Electrical equipment,
 appliances, and components 30,535 13,445

 Transportation equipment 143,045 67,302
 Motor vehicles, bodies and
 trailers, and parts 137,267 65,652
 Other 5,778 1,650
 Furniture and related products 1,047 515
 Miscellaneous manufacturing 27,640 9,460

Wholesale trade 283,125 101,759
 Motor vehicles and motor vehicle
 parts and supplies 87,124 44,443
 Professional and commercial
 equipment and supplies 23,747 7,761
 Electrical goods 29,733 7,968
 Other durable goods 51,368 14,237
 Petroleum and petroleum products 24,911 8,926
 Other nondurable goods 66,242 18,403

Retail trade 51,304 32,834
 Food and beverage stores 30,817 24,900
 Other 20,487 7,934

Information 156,163 58,106
 Publishing industries 51,457 6,279
 Motion picture and sound
 recording industries 23,312 4,394
 Broadcasting and
 telecommunications 77,942 46,053
 Broadcasting, cable networks,
 and program distribution 25,843 3,486
 Telecommunications 52,099 42,567
 Information services and
 data processing services 3,452 1,380

Finance (except depository
 institutions) and insurance 1,789,405 41,019
 Finance, except depository
 institutions 1,017,707 8,933
 Insurance carriers and
 related activities 771,697 32,086

Real estate and rental and leasing 123,474 99,825
 Real estate 108,470 92,818
 Rental and leasing (except
 real estate) 15,004 7,007

Professional, scientific, and
 technical services 24,332 5,556
 Architectural, engineering,
 and related services 3,955 1,350
 Computer systems design and
 related services 8,815 1,764
 Management, scientific, and
 technical consulting 994 65
 Other 10,568 2,377

Other industries 219,218 139,742
 Agriculture, forestry, fishing,
 and hunting 5,008 3,197
 Mining 50,471 49,063
 Utilities 19,592 12,034
 Construction 15,175 6,362
 Transportation and warehousing 33,275 25,197
 Management of nonbank companies
 and enterprises 16,230 246
 Administration, support, and
 waste management 17,079 7,472
 Health care and social assistance 12,625 3,904
 Accommodation and food services 32,399 24,482
 Accommodation 25,587 21,205
 Food services and drinking
 places 6,812 3,278
 Miscellaneous services 17,364 7,785

 Millions of dollars

 Expend-
 itures for
 property
 plant,
 and Sales
 equipment

 All industries 134,766 1,881,865

Manufacturing 60,197 834,396

 Food 2,098 49,815
 Beverages and tobacco products 543 15,176
 Textiles, apparel, and
 leather products 419 8,474
 Wood products 97 2,216
 Paper 1,245 19,566
 Printing and related
 support activities 389 6,081
 Petroleum and coal products 10,721 95,293

 Chemicals 10,683 141,875
 Basic chemicals 4,334 33,425
 Resins and synthetic rubber,
 fibers, and filaments 1,297 17,726
 Pharmaceuticals and medicines 2,933 52,334
 Soap, cleaning compounds,
 and toilet preparations 609 20,542
 Other 1,510 17,847

 Plastics and rubber products 2,215 26,037
 Nonmetallic mineral products 2,860 30,208
 Primary and fabricated metals 4,369 66,578
 Primary metals 2,973 41,636
 Fabricated metal products 1,395 24,943

 Machinery 1,680 49,751
 Agricultural, construction,
 and mining machinery 362 10,943
 Industrial machinery 205 5,673
 Other 1,113 33,135

 Computers and electronic products 6,367 97,391
 Computer and peripheral
 equipment 464 17,303
 Communications equipment 1,215 26,685
 Audio and video equipment (D) (D)
 Semiconductors and other
 electronic components 2,862 20,718
 Navigational, measuring,
 and other instruments 600 (D)
 Magnetic and optical media (D) 2,887

 Electrical equipment,
 appliances, and components 2,338 32,865

 Transportation equipment 13,024 169,701
 Motor vehicles, bodies and
 trailers, and parts 12,739 163,260
 Other 285 6,441
 Furniture and related products 76 1,763
 Miscellaneous manufacturing 1,165 21,604

Wholesale trade 24,447 491,520
 Motor vehicles and motor vehicle
 parts and supplies 15,319 109,545
 Professional and commercial
 equipment and supplies 1,915 40,201
 Electrical goods 1,553 52,812
 Other durable goods 1,689 95,891
 Petroleum and petroleum products 1,076 60,213
 Other nondurable goods 2,895 132,859

Retail trade 4,395 97,275
 Food and beverage stores 3,036 70,662
 Other 1,359 26,613

Information 9,175 74,060
 Publishing industries 998 23,676
 Motion picture and sound
 recording industries 573 11,909
 Broadcasting and
 telecommunications 7,420 35,036
 Broadcasting, cable networks,
 and program distribution 532 10,913
 Telecommunications 6,889 24,123
 Information services and
 data processing services 184 3,439

Finance (except depository
 institutions) and insurance 8,299 187,956
 Finance, except depository
 institutions 3,107 78,184
 Insurance carriers and
 related activities 5,191 109,772

Real estate and rental and leasing 11,483 21,121
 Real estate 9,901 17,257
 Rental and leasing (except
 real estate) 1,582 3,864

Professional, scientific, and
 technical services 747 20,541
 Architectural, engineering,
 and related services 179 5,348
 Computer systems design and
 related services 326 7,481
 Management, scientific, and
 technical consulting 14 499
 Other 229 7,212

Other industries 16,922 154,995
 Agriculture, forestry, fishing,
 and hunting 412 2,257
 Mining 4,726 22,764
 Utilities 1,586 28,078
 Construction 1,592 26,642
 Transportation and warehousing 3,233 23,612
 Management of nonbank companies
 and enterprises 73 (D)
 Administration, support, and
 waste management 1,065 18,416
 Health care and social assistance 417 9,221
 Accommodation and food services 1,652 17,388
 Accommodation 1,301 8,241
 Food services and drinking
 places 351 9,147
 Miscellaneous services 1,266 (D)

 Millions of dollars

 Net Gross
 income product

 All industries 33,276 418,138

Manufacturing 17,925 224,372

 Food 743 10,796
 Beverages and tobacco products 865 4,785
 Textiles, apparel, and
 leather products 205 3,063
 Wood products 145 656
 Paper -30 6,330
 Printing and related
 support activities -216 2,362
 Petroleum and coal products 261 26,445

 Chemicals 3,226 42,935
 Basic chemicals 862 9,444
 Resins and synthetic rubber,
 fibers, and filaments 118 4,733
 Pharmaceuticals and medicines 1,134 18,217
 Soap, cleaning compounds,
 and toilet preparations 1,169 5,577
 Other -57 4,963

 Plastics and rubber products 391 9,157
 Nonmetallic mineral products 1,840 11,793
 Primary and fabricated metals 1,644 17,250
 Primary metals 692 9,847
 Fabricated metal products 951 7,402

 Machinery 855 14,622
 Agricultural, construction,
 and mining machinery 236 2,666
 Industrial machinery -189 1,750
 Other 808 10,206

 Computers and electronic products -1,922 19,402
 Computer and peripheral
 equipment -1,230 1,552
 Communications equipment -1,147 5,169
 Audio and video equipment (D) (D)
 Semiconductors and other
 electronic components 114 5,273
 Navigational, measuring,
 and other instruments (D) 2,603
 Magnetic and optical media -183 (D)

 Electrical equipment,
 appliances, and components 1,157 9,925

 Transportation equipment 6,957 36,056
 Motor vehicles, bodies and
 trailers, and parts 6,823 34,204
 Other 134 1,852
 Furniture and related products 80 604
 Miscellaneous manufacturing 823 8,192

Wholesale trade 3,884 51,292
 Motor vehicles and motor vehicle
 parts and supplies 1,062 9,965
 Professional and commercial
 equipment and supplies -523 5,436
 Electrical goods 610 7,006
 Other durable goods 1,174 10,926
 Petroleum and petroleum products 28 4,952
 Other nondurable goods 1,534 13,007

Retail trade 1,373 26,032
 Food and beverage stores 1,445 19,164
 Other -72 6,868

Information -768 23,186
 Publishing industries 1,034 9,595
 Motion picture and sound
 recording industries 452 2,387
 Broadcasting and
 telecommunications -2,438 9,616
 Broadcasting, cable networks,
 and program distribution -175 2,433
 Telecommunications -2,262 7,184
 Information services and
 data processing services 163 1,588

Finance (except depository
 institutions) and insurance 10,292 23,954
 Finance, except depository
 institutions 1,372 7,130
 Insurance carriers and
 related activities 8,920 16,824

Real estate and rental and leasing 1,411 9,679
 Real estate 1,042 7,872
 Rental and leasing (except
 real estate) 388 1,807

Professional, scientific, and
 technical services -202 7,961
 Architectural, engineering,
 and related services 177 1,848
 Computer systems design and
 related services -421 3,047
 Management, scientific, and
 technical consulting 63 331
 Other -21 2,734

Other industries 281 51,662
 Agriculture, forestry, fishing,
 and hunting 99 725
 Mining -1,573 9,132
 Utilities 436 2,037
 Construction -169 5,213
 Transportation and warehousing 1,151 8,921
 Management of nonbank companies
 and enterprises (D) -330
 Administration, support, and
 waste management -595 10,323
 Health care and social assistance -155 4,306
 Accommodation and food services 599 9,081
 Accommodation 449 4,489
 Food services and drinking
 places 150 4,591
 Miscellaneous services (D) 2,255

 Millions of
 dollars

 Thou-
 Com- sands of
 pensation employees
 of employees

 All industries 260,661 5,633.0

Manufacturing 134,886 2,539.6

 Food 6,859 159.0
 Beverages and tobacco products 2,126 38.9
 Textiles, apparel, and
 leather products 2,188 68.0
 Wood products 419 11.5
 Paper 3,543 85.4
 Printing and related
 support activities 2,151 39.8
 Petroleum and coal products 6,301 82.8

 Chemicals 25,798 380.0
 Basic chemicals 5,251 79.7
 Resins and synthetic rubber,
 fibers, and filaments 2,718 42.7
 Pharmaceuticals and medicines 11,679 144.3
 Soap, cleaning compounds,
 and toilet preparations 3,268 55.5
 Other 2,682 57.8

 Plastics and rubber products 6,447 138.6
 Nonmetallic mineral products 6,656 139.8
 Primary and fabricated metals 11,357 224.1
 Primary metals 6,192 101.8
 Fabricated metal products 5,165 122.3

 Machinery 10,398 209.7
 Agricultural, construction,
 and mining machinery 1,622 38.0
 Industrial machinery 1,343 23.8
 Other 7,434 147.9

 Computers and electronic products 16,091 282.9
 Computer and peripheral
 equipment 1,926 35.7
 Communications equipment 4,818 85.1
 Audio and video equipment (D) K
 Semiconductors and other
 electronic components 3,712 71.8
 Navigational, measuring,
 and other instruments 1,991 36.7
 Magnetic and optical media (D) J

 Electrical equipment,
 appliances, and components 7,284 167.6

 Transportation equipment 21,140 368.2
 Motor vehicles, bodies and
 trailers, and parts 19,793 337.6
 Other 1,348 30.6
 Furniture and related products 430 14.9
 Miscellaneous manufacturing 5,698 128.6

Wholesale trade 27,760 526.9
 Motor vehicles and motor vehicle
 parts and supplies 4,427 74.5
 Professional and commercial
 equipment and supplies 4,162 78.8
 Electrical goods 4,090 74.3
 Other durable goods 8,427 123.8
 Petroleum and petroleum products 938 12.7
 Other nondurable goods 7,714 162.9

Retail trade 14,928 679.2
 Food and beverage stores 10,598 496.7
 Other 4,329 182.6

Information 14,877 266.9
 Publishing industries 6,016 105.1
 Motion picture and sound
 recording industries 1,882 38.2
 Broadcasting and
 telecommunications 5,917 106.0
 Broadcasting, cable networks,
 and program distribution 1,334 19.9
 Telecommunications 4,583 86.0
 Information services and
 data processing services 1,062 17.6

Finance (except depository
 institutions) and insurance 22,733 234.9
 Finance, except depository
 institutions 11,391 65.9
 Insurance carriers and
 related activities 11,341 169.0

Real estate and rental and leasing 1,772 39.1
 Real estate 1,219 24.0
 Rental and leasing (except
 real estate) 554 15.1

Professional, scientific, and
 technical services 7,311 104.5
 Architectural, engineering,
 and related services 1,630 28.1
 Computer systems design and
 related services 2,938 38.6
 Management, scientific, and
 technical consulting 247 2.4
 Other 2,496 35.4

Other industries 36,394 1,241.9
 Agriculture, forestry, fishing,
 and hunting 449 12.8
 Mining 4,707 67.8
 Utilities 605 9.5
 Construction 4,541 83.9
 Transportation and warehousing 5,608 171.2
 Management of nonbank companies
 and enterprises 37 .6
 Administration, support, and
 waste management 9,186 370.3
 Health care and social assistance 3,317 112.2
 Accommodation and food services 6,058 331.2
 Accommodation 2,291 95.1
 Food services and drinking
 places 3,767 236.0
 Miscellaneous services 1,886 82.4

 Millions of dollars

 US exports US imports
 of goods of goods
 shipped by shipped to
 affiliates affiliates

 All industries 150,836 289,679

Manufacturing 87,581 126,924

 Food 3,023 2,498
 Beverages and tobacco products 1,538 1,237
 Textiles, apparel, and
 leather products 458 567
 Wood products 228 239
 Paper 1,813 629
 Printing and related
 support activities 139 295
 Petroleum and coal products 2,909 9,109

 Chemicals 14,930 14,429
 Basic chemicals 4,409 3,568
 Resins and synthetic rubber,
 fibers, and filaments 2,664 1,472
 Pharmaceuticals and medicines 4,135 7,368
 Soap, cleaning compounds,
 and toilet preparations 957 447
 Other 2,765 1,573

 Plastics and rubber products 2,309 3,578
 Nonmetallic mineral products 680 1,633
 Primary and fabricated metals 5,212 8,893
 Primary metals 3,145 6,381
 Fabricated metal products 2,066 2,512

 Machinery 7,936 7,438
 Agricultural, construction,
 and mining machinery 1,538 2,372
 Industrial machinery 1,257 1,022
 Other 5,142 4,044

 Computers and electronic products 14,306 26,771
 Computer and peripheral
 equipment 1,489 (D)
 Communications equipment 4,514 5,906
 Audio and video equipment (D) (D)
 Semiconductors and other
 electronic components 3,145 5,402
 Navigational, measuring,
 and other instruments (D) 576
 Magnetic and optical media 313 386

 Electrical equipment,
 appliances, and components 4,957 2,967

 Transportation equipment 246,091 45,241
 Motor vehicles, bodies and
 trailers, and parts 23,205 44,468
 Other 1,404 753
 Furniture and related products 72 65
 Miscellaneous manufacturing 2,262 1,336

Wholesale trade 56,127 155,164
 Motor vehicles and motor vehicle
 parts and supplies 3,732 48,354
 Professional and commercial
 equipment and supplies 2,153 18,041
 Electrical goods 4,607 25,993
 Other durable goods 14,313 31,757
 Petroleum and petroleum products 4,040 6,146
 Other nondurable goods 26,381 26,873

Retail trade 1,401 4,089
 Food and beverage stores 13 425
 Other 1,387 3,864

Information 870 208
 Publishing industries 717 (D)
 Motion picture and sound
 recording industries 149 10
 Broadcasting and
 telecommunications 1 (D)
 Broadcasting, cable networks,
 and program distribution 0 0
 Telecommunications 1 (D)
 Information services and
 data processing services 2 0

Finance (except depository
 institutions) and insurance 4 49
 Finance, except depository
 institutions 4 49
 Insurance carriers and
 related activities 0 0

Real estate and rental and leasing 27 224
 Real estate (D) (D)
 Rental and leasing (except
 real estate) (D) (D)

Professional, scientific, and
 technical services 283 232
 Architectural, engineering,
 and related services 149 78
 Computer systems design and
 related services 107 151
 Management, scientific, and
 technical consulting 0 0
 Other 27 4

Other industries 4,542 2,790
 Agriculture, forestry, fishing,
 and hunting 406 94
 Mining 3,664 548
 Utilities 53 1,852
 Construction 196 103
 Transportation and warehousing 98 39
 Management of nonbank companies
 and enterprises (D) 3
 Administration, support, and
 waste management (D) 4
 Health care and social assistance (D) (D)
 Accommodation and food services (*) 3
 Accommodation (*) 3
 Food services and drinking
 places 0 0
 Miscellaneous services 44 (D)

(*) Less than $500,000

(D) Suppressed to avoid disclosure of data of individual companies

NOTES---Size ranges are given in employment cells that are suppressed The size ranges are: A--1 to 499; F--500 to 999; G--1,000 to 2,499; H--2,500 to 4,999; I--5,000 to 9,999; J--10,000 to 24,999; K--25,000 to 49,999; L--50,000 to 99,999; M--100,000 or more

Estimates for 1998 are preliminary

Acknowledgments

The 1998 annual survey was conducted under the supervision of Joseph F. Cherry III, with contributions by Juris E. Abolins, Chester C. Braham, Emily D. Curry, Hien X. Dang, Constance T. Deve, Nicole Donnegan, Chris Goins, Charles R. Gravitz, David N. Hale, Earl F. Holmes, Lonnie Hunter, Carol L. Lefkowitz, Stephanie A. Lewis, Edna A. Ludden, Betty K. Maddy, Isabel L. McConnell, Demetria A. McCormick, Gregory L. McCormick, Sidney A. Moskowitz, Christine L. Perrone, Ronald L. Ross, William R. Shupe, Clarence D. Smith, Marie P. Smith, John R. Starnes, Diann L. Vann, Kimyetta Whitehead, and Dorrett E. Williams.

Computer programming for data estimation and the generation of data tables was provided by Diane Young, Neeta Kapoor, and Tara O'Brien.

Key Terms

The following key terms are used to describe U.S. affiliates of foreign companies and their operations.

U.S. affiliate. A U.S. business enterprise in which there is foreign direct investment--that is, in which a single foreign person owns or controls, directly or indirectly, 10 percent or more of the voting securities of an incorporated U.S. business enterprise or an equivalent interest in an unincorporated U.S. business enterprise. "Person" is broadly defined to include any individual, corporation, branch, partnership, associated group, association, estate, trust, or other organization and any government (including any corporation, institution, or other entity or instrumentality of a government). A "foreign person" is any person resident outside the United States--that is, outside the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and all U.S. territories and possessions.

Majority-owned U.S. affiliate. A U.S. affiliate that is owned more than 50 percent by foreign direct investors.

Foreign parent. The first person outside the United States in a U.S. affiliate's ownership chain that has a direct investment interest in the affiliate.

Ultimate beneficial owner (UBO). That person, proceeding up a U.S. affiliate's ownership chain, beginning with and including the foreign parent, that is not owned more than 50 percent by another person. Unlike the foreign parent, the UBO of an affiliate may be located in the United States. The UBO of each U.S. affiliate is identified to ascertain the person that ultimately owns or controls the U.S. affiliate and that therefore ultimately derives the benefits from ownership or control.

Foreign parent group. Consists of (1) the foreign parent, (2) any foreign person, proceeding up the foreign parent's ownership chain, that owns more than 50 percent of the person below it, up to and including the UBO, and (3) any foreign person, proceeding down the ownership chain(s) of each of these members, that is owned more than 50 percent by the person above it.

Gross product. The contribution to U.S. gross domestic product, which is the goods and services produced by labor and property located in the United States. Gross product, often referred to as "value added," can be measured as gross output (sales or receipts and other operating income plus inventory change) minus intermediate inputs (purchased goods and services). Alternatively, it can be measured as the sum of the costs incurred (except for intermediate inputs) and the profits earned in production. The estimates of gross product that are presented in this article were prepared by summing cost and profit data collected in the annual and benchmark surveys of foreign direct investment in the United States.

Data Availability

This article presents a summary of the preliminary estimates from the 1998 annual survey of foreign direct investment in the United States. More detailed estimates will be published this fall; availability will be announced on the inside back cover of the SURVEY. Revised estimates will be published next year. Estimates of U.S. affiliate operations in 1977-97 are available on diskettes and in compressed files that can be downloaded from BEA's Web site at <www.bea.doc.gov>.

The estimates for 1991-97 are also available in publications.

For more information on these products and how to get them, see the International Investment Division Product Guide on BEA's Web site at <www.bea.doc.gov/bea/dil.htm>, or write to the Research Branch (BE-50), International Investment Division, Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230.

(1.) The estimates of gross product of U.S. affiliates are conceptually consistent with the U.S. estimates of gross domestic product, or gross domestic product originating, by industry. Both sets of estimates are income-based estimates; that is, they are measured as the sum of costs incurred (except for intermediate inputs) and the profits earned in production (see the box "Key Terms").

The financial and operating data of nonbank U.S. affiliates presented in this article cover the entire operations of the U.S. affiliate, irrespective of the percentage of foreign ownership. All data are on a fiscal year basis. Thus, for 1998, an individual affiliate's fiscal year is its financial reporting year that ended in calendar year 1998.

The estimates of gross product and the other data items for affiliate operations for 1998 are preliminary. The estimates for 1997 are revised; for most of the key data items, the revisions to the totals ranged from -4 percent to 4 percent,

(2.) According to data from BEA's annual survey of new foreign investments, outlays by foreign direct investors to acquire or establish businesses in the United States surged from $69.7 billion in 1997 to $215.3 billion in 1998 (the previous high was $72.7 million in 1988). Investment outlays increased further in 1999, to a record $282.9 billion. See Ned G. Howenstine and Rosaria Troia, "Foreign Direct Investment in the United States: New Investment in 1999," SURVEY OF CURRENT BUSINESS 80 (June 2000): 5.3-63.

(3.) For a discussion of some of the industry-specific factors behind the largest investment transactions in 1998, see Mahnaz Fahim-Nader, "Foreign Direct Investment in the United States: New Investment in 1998," SURVEY 79 (June 1999): 16-23.

(4.) The data on affiliate operations are now classified by industry according to a new system that is based on the 1997 North American Industry Classification System; see the box "New Industry Classifications" in William J. Zeile, "Foreign Direct Investment in the United States: Preliminary Results from the 1997 Benchmark Survey," SURVEY 79 (August 1999): 24.

(5.) Crude oil prices fell 34 percent in 1998, according to 12-month averages of the refiners' acquisition cost of domestic and imported crude oil from the Energy Information Administration (EIA) of the U.S. Department of Energy. The decrease in oil prices was not accompanied by a corresponding increase in demand and production: Worldwide production of crude oil increased only 2 percent.

(6.) Although the rate of change in U.S.-private-industry gross product serves as a convenient benchmark against which the increase in U.S.-affiliate gross product can be evaluated, the two growth rates are not strictly comparable, because the latter partly reflects transfers in ownership that do not represent increased production for the whole economy. Similarly, changes in U.S.-affiliate employment, exports, and imports, which partly reflect changes in ownership, are not strictly comparable to the changes for the whole economy.

(7.) In 1998, as in 1997, outlays by Japanese direct investors accounted for less than 5 percent of the total outlays by foreign direct investors to acquire or establish businesses in the United States. See table 4 in Howenstine and Troia, "New Investment in 1999," 58.

(8.) Each U.S. affiliate is classified in the industry that accounts for the largest portion of its sales. Many U.S. affiliates are involved in a variety of business activities; changes in the mix of these activities can cause an affiliates's industry classification to change, but an affiliate is reclassified only if the change in the primary activity from the preceding year is significant or if the change has persisted for 2 years.

(9.) Because U.S. affiliates tend to be relatively concentrated in less labor-intensive sectors of the economy (such as manufacturing), the affiliate share of employment has consistently been lower than the affiliate share of gross product.

(10.) Employment data by industry of sales are used to estimate shares; this basis approximates the establishment-based disaggregation of the corresponding data for all U.S. businesses. See the box "Using Employment Data to Estimate Affiliate Shares of the U.S. Economy by Industry" on page 148.

(11.) According to data from the Census Bureau's County Business Patterns, there were 3,000 manufacturing employees in the District of Columbia and 23,000 manufacturing employees in North Dakota in 1998. About two-thirds of the manufacturing employees in the District of Columbia were employed in printing and related support activities.

(12.) In 1998, affiliates classified in wholesale trade accounted for 37 percent of affiliate exports and for 53 percent of affiliate imports. Wholesale trade affiliates played an even larger role in U.S.-affiliate trade in earlier years.

(13.) Data on the destination of U.S.-affiliate exports, which were most recently collected in the 1997 benchmark survey of foreign direct investment in the United States indicate that exports to Asia and Pacific accounted for 41 percent of the total exports of U.S. affiliates in 1997.

(14.) Data on the destination of U.S.-affiliate exports indicate that more than 70 percent of the intrafirm exports of Japanese-owned and Korean-owned affiliates were shipped to their respective home countries.

RELATED ARTICLE: Data on Foreign Direct Investment in the United States

BEA collects three broad sets of data on foreign direct investment in the United States (FDIUS): (1) Financial and operating data of U.S. affiliates, (2) data on U.S. businesses newly acquired or established by foreign direct investors (new investment data), and (3) international transactions (balance of payments) and direct investment position data. This article presents the financial and operating data; new investment data were published in "Foreign Direct Investment in the United States: New Investment in 1999" in the June 2000 issue of the SURVEY OF CURRENT BUSINESS; the international transactions and direct investment position data were published in the articles "The International Investment Position of the United States at Yearend 1999," "U.S. International Transactions, First Quarter 2000," and "Direct Investment Positions for 1999: Country and Industry Detail," in the July 2000 issue of the SURVEY.

Each of the three data sets focuses on a distinct aspect of FDIUS. The financial and operating data provide a picture of the overall activities of the U.S. affiliates; the new investment data provide information about U.S. businesses that are newly acquired or established by foreign direct investors, regardless of whether the invested funds were raised in the United States or abroad; and the international transactions and direct investment position data cover foreign investors' transactions with, and positions in, both new and existing U.S. affiliates.(1)

Financial and operating data of U.S. affiliates. The data on the overall operations of U.S. affiliates are collected in BEA's annual and benchmark surveys of FDIUS. (Benchmark surveys, which are BEA's most comprehensive surveys of foreign direct investment in terms of both coverage of companies and subject matter, are taken in place of the annual survey once every 5 years.) The data cover U.S. affiliates' balance sheets and income statements, employment and compensation of employees, trade in goods, research and development expenditures, sources of finance, and selected data by State. In addition, the gross product of affiliates is estimated from data reported in these surveys.

Except in benchmark survey years, these data, unlike the new investment data, cover only nonbank affiliates. The financial and operating data for affiliates are on a fiscal year basis. The data cover the entire operations of the U.S. affiliate, irrespective of the percentage of foreign ownership.

New investment data. The data on outlays by foreign direct investors to acquire or establish affiliates in the United States are collected on a calendar year basis in BEA's survey of new FDIUS. In addition, the new investment survey collects selected data on the operations of the newly acquired or established affiliates. For newly acquired affiliates, these data are for (or as of the end of) the most recent fiscal year preceding the acquisition, and for newly established businesses, they are projected for (or as of the end of) the first year of operation. The data cover the entire operations of the business, irrespective of the percentage of foreign ownership.

International transactions and direct investment position data. These data are collected in the quarterly survey of FDIUS. The data cover the U.S. affiliate's transactions and positions with its foreign parent or other members of its foreign parent group, so these data focus on the foreign parent's share, or interest, in the affiliate rather than on the affiliate's overall size or level of operations. The major items included in the U.S. international transactions (balance of payments) accounts are direct investment financial flows, direct investment income, royalties and license fees, and other services transactions with the foreign parent group.

(1.) For a more detailed discussion of the differences between these three sets of data, see Alicia M. Quijano, "A Guide to BEA Statistics on Foreign Direct Investment in the United States," SURVEY 70 (February 1990): 29-37. This guide is available on BEA's Web site at <www.bea.doc.gov/bea/ail.htm>.

For a comparison of the data on affiliate operations with the data on new investment, see the appendix "Sources of Data" in Mahnaz Fahim-Nader and William J. Zeile, "Foreign Direct Investment in the United States: New Investment in 1994 and Affiliate Operations in 1993," SURVEY 75 (May 1995): 68-70.

RELATED ARTICLE: Using Employment Data to Estimate Affiliate Shares of the U.S. Economy by Industry

In this article, data on employment are used to estimate affiliate shares of the U.S. economy by industry because these data can be disaggregated by industry of sales, a basis that approximates the disaggregation of the data for all U.S. businesses by industry of establishment. Thus, the data on affiliate employment can be used to calculate the affiliate shares of the U.S. economy at a greater level of industry detail than can be calculated using the gross product estimates or other data, which can only be disaggregated on the basis of industry of affiliate.(1)

In the classification by industry of sales, the data on affiliate employment (and sales) are distributed among all of the industries in which the affiliate reports sales. As a result, employment classified by industry of sales should approximate that classified by industry of establishment (or plant), because an affiliate that has an establishment in an industry usually also has sales in that industry.(2)

In contrast, in the classification by industry of affiliate, all of the operations data (including the employment data) for an affiliate are assigned to that affiliate's "primary" industry--that is, the industry in which it has the most sales.(3) As a result, any affiliate operations that take place in secondary industries will be classified as operations in the primary industry.

(1.) Establishment-level data from a joint project of BEA and the Bureau of the Census can be used to calculate affiliate shares at an even greater level of detail. These data show each four-digit manufacturing industry in the Standard Industrial Classification; they are currently available for 1987-92. The data for foreign-owned manufacturing establishments are analyzed in a number of SURVEY articles that can be accessed at BEA's Web site at <www.bea.doc.gov/bea/ail.htm>.

(2.) However, this is not the case if one establishment of an affiliate provides all of its output to another establishment of that affiliate. For example, if an affiliate operates both a metal mine and a metal-manufacturing plant and if the entire output of the mine is used by the manufacturing plant, all of the affiliate's sales will be in metal manufacturing, and none in metal mining. When the mining employees are distributed by industry of sales, they are classified in manufacturing even though the industry of that establishment is mining.

(3.) An affiliate's primary industry is based on a breakdown of the affiliate's sales by BEA International Surveys Industry classification code.