With the longest global economic expansion on record, international investors face an increasingly complex calculus in identifying cost-effective opportunities for potential downturn protection, slowing the pace of cross-border capital flows to and from the U.S.
Inbound capital to the U.S. in the first half of 2019 totaled $17 billion, a decrease of 48% from H1 2018. About half of this decline was due to less M&A activity after record levels in 2018. Cross-border investment volume of individual assets and portfolios (excluding entity-level) was down by 26% relative to H1 2018.
U.S. outflows to foreign regions also decreased in H1 2019, falling 18% year-over-year to $18.6 billion. Given the less-pronounced pullback in outbound capital, overseas outflows by U.S. investors outpaced U.S. inflows from foreign investors, reversing the trend of the past four years.