Middle East sees increase in investment from US

FDI from the US into the Middle East has continued to increase between January 2016 to December 2018, according to data from greenfield investment monitor fDi Markets. 

The Middle East attracted 122 investments from 103 US-based companies in 2016. The investments created 8150 jobs with a total capital expenditure of $6.12bn. In 2017, 113 US-based companies invested in126 projects in the region creating 13,786 jobs, an increase of almost 70% from the previous year. Capital expenditure also witnessed an upturn of almost 100%, increasing to $12.2bn during this period.

The number of US-based companies investing in the Middle East continued to rise during 2018, with 131 firms investing in 154 projects in the region. In contrast, capital expenditure and job creation both witnessed a decline of 21% and 31%, respectively. 

The United Arab Emirates attracted the lion’s share of US-based investment (51%), followed by Israel (22%) and Saudi Arabia (15%). The key sector industries for investment during the review period were software and IT services (which attracted more than one-quarter of all FDI), business services (which attracted 15%) and communications (which accounted for just below 10% of total inbound US investment).

California-based Oracle, a provider of business hardware and software solutions, was the leading investment company in terms of project numbers. Oracle invested in eight Middle Eastern projects, including greenfield offices, a data centre and innovation centre, as well as the expansion of an existing data centre facility in Saudi Arabia. In total Oracle invested $366m and created 493 jobs in the region during the three-year time period.

New York-based companies IBM and WeWork placed second and third, respectively, investing in a combined 14 projects and creating a total of 578 jobs. California-based Intel was the leading investor in the region with regards to capital expenditure, investing $13.3bn in Israel in greenfield and expansion projects. 

Looking ahead, it remains to be seen whether the increase of investment from the US into the Middle East will continue. Data available for the first two quarters of 2019 shows a decline of 30% in project numbers in comparison with the first half of 2018. Job creation figures, in contrast, during the second quarter of 2019 show a 9% increase when compared with the second quarter of 2018.