The Organization for Economic Co-operation and Development reports that foreign direct investment (FDI) outflows from the United States reached an all-time high of US$252 billion in 2004, up from US$141 billion in 2003.

Some of this outflow was due to weakness of the dollar, but it also confirmed continuing strong interest among U.S. companies in acquiring corporate assets abroad, the OECD explained.

Of the largest 25 cross-border mergers and acquisitions in 2004, five had a U.S.-based company as the acquirer, it notes. And, it says the recovery of M&A activity in 2004 has carried on into 2005. On present trends, both inward and outward FDI in OECD countries could increase by 10%-15% in 2005, OECD estimates suggest.

The OECD estimates that FDI outflows more than doubled in Canada, from US$21.5 billion in 2003 to US$47.4 billion in 2004. However, FDI inflows were more or less flat at just US$6.3 billion. “Canada experienced one of the world’s largest increases in outward FDI in 2004, reflecting, among other things, the largest takeover in history by a Canadian enterprise of a foreign company,” the OECD says. As an outward direct investor, Canada shared third place with France in the 2004 league table. The unchanged headline figures for inflows mask a drop in net acquisitions by foreign enterprises that was compensated for by higher inter-company loans, the OECD says.

For the OECD area as a whole, according to newly published data, FDI inflows continued on a downward trend, falling to US$407 billion in 2004 from US$459 billion in 2003. Outflows, on the other hand, rose from US$593 billion in 2003 to US$668 billion in 2004.

Against this background, net FDI outflows from OECD countries to the rest of the world reached record high levels in 2004: the OECD area was a net contributor of US$261 billion worth of direct investment – most of which went to developing countries. In 2003, OECD countries invested a net US$134 billion outside the OECD area.