Foreign Investment Into Tennessee 2020
Tables and Graphs
It is likely no surprise that the size of Tennessee's 2020 inbound foreign investment was reduced from previous years. But the bigger surprise is that the reduction was as limited as it was. There were sixteen new investments announced for the state in 2020. The dollar value of those investments combined was $898 million, and they added 2,894 jobs to the state economy. Both of these figures were the lowest since 2011. On the other hand, the size of the investments was down one quarter from 2019, while the employment figure was off by one fifth. Neither seems that dramatic given what one might expect in the year of Covid.
The largest single investment by far was the expansion of the Domtar plant (Canada) in Kingsport. At $400 million, it was more than four times the size of the next largest announcement. However, several other investments actually produced more employment, led by the TTI Floor Car (Hong Kong) expansion in Cookeville.
Motor Vehicles Again
As per usual, the largest investment sector was automobiles. Six of the sixteen announcements involved auto parts. Four others were in the service sector, whether transportation/logistics or professional services.
Japan?
Perhaps the biggest shift this past year was the absence of a single investment coming from Japan. For two decades and more, Japan has been the single biggest source of investment coming into Tennessee. Though last year it was eclipsed by Germany, which in 2020 again took the prize for the largest employment creation, it's still a bit of shock to see no Japanese investment at all coming to Tennessee. (Thanks to Domtar, Canada had the largest dollar investment.)
Future
With Covid still around, and all the uncertainty that entails, it would appear that 2021 is unlikely to produce huge foreign investment either. However, the continued expansion of Volkswagen, and in the EV sector of Nissan and GM, has already led to considerable 2021 investments in that sector. (And thanks to the arrival of NTT Dataservices, Japan will not have another year of no investment.)
The value of the dollar is always a consideration in foreign investment. The expectations were for a falling dollar, which generally produces more foreign interest in locating operations here, but so far that expectation has not borne out. However robust U.S. economic growth, another expectation, should also act as a stimulus to investment. Against that, few anticipate much investment from China, which not all that long ago was viewed as the coming major investor.
The relatively strong 2020 foreign investment suggests that Tennessee remains a desirable place for foreign firms to locate. This bodes well for continuing investment in 2021, regardless of the unusual level of uncertainty we must deal with.
