Foreign Investment in U.S. Falls 60.4%

Foreign investors shied away from the U.S. in 2001, as direct foreign investment fell by 60.4% from 2000, the Commerce Department said.

Foreign direct investment to buy or establish U.S. businesses dropped to $132.94 billion from the record $335.63 billion in 2000, Commerce said. It was the biggest annual drop in direct investment since 1991, when it declined 61.3% from 1990 levels.

“The decrease reflected weakness in the U.S. and world economies and a sharp drop in overall merger and acquisition activity worldwide,” Commerce said.

For the U.S. dollar, which has been depreciating significantly in recent months, the report was more bad news. The U.S. has funded its international trade deficit with money from foreign investors.