Foreign Investment into Tennessee 2023
Tables and Graphs
This past year saw nothing as dramatic as last year’s massive LG Energy foreign investment, the single largest in Tennessee history. But it was another strong year for global investment into the state. Tennessee again outstripped most other areas of the U.S. in this regard. Twenty-seven firms announced new investments in the state or expanded their existing activities. Together, they accounted for over $2.4 billion in new economic activity. This was the third highest year for new foreign investment over the past fifteen. (The two larger years were 2021 and 2022.) This activity combined to create 4,711 jobs in twenty-four different communities.
Canada’s Turn
After years of investment being dominated by Japan or South Korea, 2023 was Canada’s turn. $1.22 billion of the year’s investment, about half of the total, came from north of the border. The largest of these involved Magna’s moving into the state. It announced three new operations, one in Lawrenceburg and two in Stanton, amounting to $790 million. Richardson International (Memphis) and SK Foods (Cleveland) each invested over $200 million. The latter produced more new jobs than any other single investment of the year. Canadian firms added, in total, 2328 jobs to the Tennessee economy. This is not to say that Japanese or Korean firms were inactive! Three Japanese firms expanded their operations to the tune of $240 million, while two new South Korean investments led to almost the same dollar total. The remainder of the foreign investment activity mostly involved Europe. (Though there were single investments from Australian, Chinese, Taiwanese, and Turkish firms.) Companies owned in eight different European countries invested $354 million into the state over 2023.
Location
Magna’s two new operations in Stanton were enough to make that town the largest recipient of foreign investment for the year. Memphis, Cleveland, and Clarksville were the other locations that saw multiple investments. With six different investments, the stretch between Chattanooga and Knoxville attracted more activity than any other region. At $700 million, it captured nearly thirty percent of Tennessee’s total foreign investment.
Another Big Year for Automotive Investment
Yet again, the automotive industry accounted for a sizable part of the investment activity. Eleven of the twenty-seven state investments were related to it. Together they accounted for $1.66 billion of investment and for 2928 jobs. This was more than two-thirds of the total value of all the year’s foreign investment. The second largest sector was the food industry. There were four investments in this economic sector, together amounting to a value of $439 million and 921 new employees.
There’s nothing to suggest that the state’s foreign investment hot streak is coming to an end. Though the EV industry has taken a few hits in recent months, it still appears to be a major industry of the future. Nor is demand for other automotive-related equipment, such as tires, seats, etc. slowing down. The steady stream of investment in other manufacturing sectors should continue as well. The two wild cards are, of course, a global economic downtown and an international trade war leading to a large rise in protectionism. Oddly, though, the latter may not be all bad news. Fear of trade barriers is a major driver of foreign investment. Foreign firms may find it better to be producing inside the U.S., than on the outside looking in.
