In 2024, majority-owned U.S. affiliates of foreign multinationals employed 8.57 million workers, reflecting a slight increase of 0.2 percent from the prior year. This number represents approximately 6.1 percent of total private-industry employment in the United States, marking a decrease from 6.2 percent in 2023. The employment landscape highlights the role of foreign businesses in the U.S. economy, particularly within the manufacturing and retail trade sectors, where they have made notable impacts.
The economic contributions of these affiliates extend beyond employment numbers. The current-dollar value added by U.S. affiliates surged 4.3 percent to reach $1.52 trillion in 2024, accounting for 6.7 percent of total business-sector value added. This growth suggests that while their share of overall employment has slightly contracted, the affiliates’ ability to contribute significantly to the gross domestic product (GDP) is robust. Notably, affiliates with ultimate beneficial owners from the United Kingdom, Japan, and Germany emerged as primary employers, underscoring the international nature of U.S. business operations.
Expenditures on property, plant, and equipment by these affiliates saw a 3.3 percent rise, totaling $328.0 billion. These investments are crucial for sustaining operational capabilities and contributing to long-term economic growth. Additionally, research and development spending grew by 5.3 percent to reach $95.5 billion, representing 12.4 percent of total U.S. business R&D. This investment in innovation is vital for enhancing competitiveness and fostering economic development.
A regional breakdown reveals that California leads with 885,200 employees in U.S. affiliates, followed by Texas with 717,400 and New York with 556,700. The manufacturing sector remains the largest employment contributor in these states, highlighting its critical importance to the affiliate network. The concentration of multinational operations in these states indicates strategic decisions by companies to leverage local markets and resources.
The trends observed in the BEA’s report illuminate both opportunities and challenges in the U.S. labor market. While foreign affiliates have maintained a presence in the U.S., the slight decline in their share of total employment raises questions about the future dynamics between domestic and foreign investment. As multinationals continue to adjust their strategies, these trends will likely influence policy discussions focused on attracting and retaining foreign investment in the U.S. economy.
Understanding these developments will be crucial as businesses and policymakers navigate the evolving economic landscape, particularly in terms of job creation and innovation. The next release of statistics from the BEA will provide further insights into the trajectory of these affiliates and their role in the broader U.S. economy.