4th Quarter 2015

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China is really the big story for 2015, as it established five new operations in the state.


Foreign Investment continued

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Nationally, Canada, China, and Japan were the three largest sources of foreign investment, and the same held true for Tennessee. China is really the big story for 2015, as it established five new operations in the state. Until very recently, there was virtually no Chinese investment here. These operations are mostly rather small (as these things go), with the combined investment of these five operations standing at $256 million. The first of these investments, the TWB Company in Nashville, was not announced until June. After that, it was gangbusters.

Five of the last ten 2015 investments were from China. As befitting a more mature investor, the five Japanese investments were all expansions rather than new investments. However, at $700 million, combined Japanese investment was once again the largest into Tennessee. The three Canadian operations accounted for $600 million of the state's foreign investment. The only other country with multiple new or expanded foreign operations was Italy, though six in total came from Western Europe.

Comparing annual investments can be misleading because of the impact of one or two massive investments on the year's totals. But if we take this into account, the clear upward trend in foreign investment in Tennessee that we have seen in recent years continued in 2015. The dollar value of investment was up about $360 million over the previous year. The trend in employment growth continued apace. In fact, once again the rate of increase in employment stemming from foreign investment exceeded the state's overall employment growth rate.

Whether the increased value of the dollar and the general global economic slowdown will have a significant impact on foreign investment in 2016 remains to be seen. But 2015 has to go into the books as yet another pretty successful year in attracting foreign investment. Adjusted for the size of the state, over the past five years, Tennessee has attracted as much as or more foreign investment than has any other American state.

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