As Economy Improves, Investors Take a Bite Into the Big Apple
Direct foreign investment is pouring into N.Y.C. at a steady rate
NEW YORK — THERE are moments, says Thomas Morrow, when he feels like a travel agent. In the past few days, he has been escorting a group of visiting South Korean business leaders to local tourist sites. ``I point out to them that New York is just a great town, with lots of attractive, safe places to live and work in - a city that is made up of very nice people.''
Mr. Morrow is hardly a neutral observer when it comes to the Big Apple. He is manager of international business development for the Port Authority of New York and New Jersey. This group is the area's main regional-planning agency, and it is actively wooing new businesses into the region.
His current campaign: winning over a large South Korean food-distribution company. The company, he says, would be a natural addition to the area, since, given immigration patterns, thousands of Korean-Americans now live here. If the South Korean concern were to locate in New York, he says, it would mean an additional 150 jobs for the city.
Aided by a resurgent economy, a sharp increase in export trade through the harbor, a skilled labor pool that includes hundreds of thousands of new immigrants, and a metropolitan region encompassing 18 million people, New York City is reemerging as a much-desired location for foreign investment. In 1993, direct foreign investment surged sixfold, and new investment is pouring into the region at a steady rate again this year.
To date, some 14 overseas companies have located in the area this year - eight in New York and six in New Jersey. The pace of foreign investment transactions is running even with or ahead of last year at this time, Morrow says. And in all of 1993, some 20 foreign companies located around the city.
ACCORDING to the United States Department of Commerce, the dollar value of direct foreign investment was $6.5 billion in 1993 in New York City alone, up from about $937 million the year before.
The upswing in direct foreign investment is not just benefiting the city; the gains are also helping the state. In 1993, some 70 foreign companies made direct foreign investments in the state; the lion's share of those transactions took place in New York City. In California, by comparison, 77 transactions that year involved direct foreign investment.
But in terms of dollar value, Empire State transactions equaled roughly $7 billion, compared with just $2.8 billion for California, according to a spokeswoman for New York State's government.
In 1992, however, the situation was almost reversed. California tallied some 92 direct foreign-investment transactions valued at $6.7 billion, while New York's 62 transactions were valued at only a little more than $1 billion, the spokeswoman says.
``There is now a continuing recognition that New York is an international marketplace,'' says Vincent Tese, state director of economic development. The state is actively courting direct investment from around the globe, identifying New York firms that export products, and helping them expand their overseas markets, Mr. Tese explains.
The increase in direct investment comes against a backdrop of an improving economy - a factor that overseas firms find attractive. New York State, and especially the metropolitan area, were hard hit by the recession of the early 1990s. ``But the economy is slowly turning around,'' says Amos Ilan, head of economic research for the Port Authority. ``Jobs are currently increasing at a rate of about 1 percent a year.'' That increase may not seem like much, he says, but it is significant when compared to job losses of the early 1990s.
In 1989, the peak year for employment in the 17-county metropolitan region, 7.6 million people held jobs, Mr. Ilan says. By 1992, that number had shrunk to 6.98 million. Today, some 7 million people work in the region.
The service-trades and security-industry sectors are doing well, he says. Retailing, transportation, and communications are also expected to show strength in the months ahead, but manufacturing remains weak, Ilan adds.