Where Foreign Direct Investment Is Moving in 2026

The United States remains one of the most attractive markets in the world for foreign direct investment (FDI). For manufacturers and industrial users serving North America, a U.S. facility can improve customer access, shorten supply chains, and create a stronger platform for long-term growth. In 2026, the opportunity is still compelling, and for many companies, the business case for U.S. expansion remains strong.

However, the level of evaluation required to minimize risk and the impact of varying constraints has increased. Companies are looking more closely at tariff exposure, infrastructure availability, project timing, and the durability of customer demand as they evaluate where and how to invest. Site Selection Group, a full-service location advisory, economic incentives, and real estate services firm, closely tracks trends and policy shifts that influence foreign direct investment in the United States. This article highlights several industries where investment is growing and where it is slowing.

Where Momentum Is Building

Semiconductors

Semiconductors remain one of the strongest FDI stories in the U.S., driven by sustained policy support and national security priorities. Recent fDi Markets analysis found semiconductor project announcements in 2025 were up 31% compared with the Biden-era annual average, reinforcing that advanced electronics capacity remains a priority for foreign investors. The Semiconductor Industry Association reports over 100 announced projects across 28 states, totaling more than $500 billion in private investment, which is expected to support over 500,000 jobs. Even with strong industry growth, limited power and water availability have become real barriers that demand tailored solutions.

Data Centers

Data centers are now one of the largest recipients of global investment. Data from the United Nations Conference on Trade and Development (UNCTAD) show the sector attracted more than $270 billion in announced foreign direct investment in 2025, accounting for over 20% of global greenfield project value. Investment momentum is equally strong in the United States, where capital investment reached approximately $162 billion in 2025, based on analysis of trends derived from data published by the U.S. Bureau of Economic Analysis. Demand trends reinforce that growth. The U.S. Department of Energy reports that data center electricity consumption has tripled over the past decade and is expected to double or even triple again by 2028, making power availability and infrastructure timing critical to site selection. Despite the industry growth, power availability, timeline to service, and public opposition have emerged as difficulties that require nuanced solutions. 

Defense

Always strong, defense-related manufacturing has become a standout growth category. According to fDi Markets, the U.S. announced 32 space and defense FDI projects in 2025, up 167% from the prior four-year average, signaling a sharp increase in foreign investment activity tied to stated national security priorities. That momentum is further supported by targeted procurement demand. The United States Department of Defense FY2026 budget includes more than $170 billion in procurement spending, including major investments in aircraft, munitions, shipbuilding, and missile systems. 

For foreign firms aligned with aerospace, electronics, and advanced materials supply chains, the U.S. offers both strong project momentum and sustained, program-driven demand.

Electrical Infrastructure Equipment

Electrical infrastructure equipment is gaining momentum as U.S. power demand accelerates. According to the National Electrical Manufacturers Association, transformer lead times can extend beyond two years and more than 30 months in highly constrained segments, underscoring persistent supply challenges. Increased demand for electricity is translating into capital deployment, with the Edison Electric Institute reporting more than $200 billion in U.S. utility investment in 2025 alone. 

For foreign manufacturers, this combination of constrained supply, sustained demand, and rising investment creates a clear opportunity to localize production in the U.S.

Stable Demand

Food & Beverage

Food and beverage remains one of the most durable end markets for foreign manufacturers evaluating U.S. expansion. The U.S. Department of Agriculture reports total U.S. food spending reached approximately $2.58 trillion in 2024, up from $2.48 trillion in 2023. fDi Markets data show project volumes have remained relatively stable year-over-year, even as other manufacturing sectors fluctuate. 

The result is a large, consistent market supported by population-driven demand and distributed production. For foreign investors, the sector offers predictable demand, steady project activity, and lower volatility relative to more cyclical industries.

Where Investment Is Becoming More Selective

Large-Scale EV Assembly

Large-scale EV assembly is becoming more selective. U.S. EV sales grew 19.2% in Q1 2025 but fell from ~98,000 units in September to ~75,000 in October after incentives expired. Capital pullbacks reinforce the shift. For example, Ford Motor Company lost more than $13 billion on EVs from 2023 to 2025. It paused its $3.5 billion Marshall, Michigan, battery plant and delayed portions of its $12 billion BlueOval projects. 

This shift is most evident in large stand-alone assembly bets, as automakers prioritize flexibility, hybrid production, and phased investments. Honda’s recent $300 million investment in Ohio reflects this approach as it enables production of internal combustion, hybrid, and electric vehicles on shared platforms.

Building Materials

Building materials investment has softened. According to fDi Markets data, U.S. building materials FDI projects were down 14% in 2025 versus the prior four-year average. That trend aligns with broader construction activity. According to the U.S. Census Bureau, housing starts declined from 1.55 million units in 2023 to 1.42 million in 2024 and remained near ~1.40 million in 2025 as higher interest rates weighed on development. At the same time, the U.S. Bureau of Labor Statistics Producer Price Index shows construction input costs remain 20–30% above pre-pandemic levels, compressing margins and delaying projects.

Textiles and Rubber

Textiles and rubber remain among the weakest manufacturing FDI categories, continuing a longer-term trend of underinvestment. According to fDi Markets data, U.S. project volumes were down 34% for textiles and 53% for rubber in 2025 versus the prior four-year average. These declines reflect structural cost disadvantages and ongoing reliance on global supply chains, as capital shifts toward higher-value manufacturing and infrastructure-related sectors.

Biotechnology

Foreign direct investment in U.S. biotechnology has slowed. According to fDi Markets data, U.S. project volumes were down 11% in 2025. That trend aligns with broader capital market trends. That trend aligns with broader capital market conditions, as McKinsey & Company reports private equity-backed biotech funding has declined by approximately 15% annually since its 2021 peak. The sector itself remains active, but FDI is less prolific. Domestic investment continues to lead, with Eli Lilly and Company announcing more than $50 billion in U.S. manufacturing investments since 2020.

What This Means for Foreign Investors

While uncertainty and perceived risk can impact investment trends, the U.S. remains a strong destination option for foreign direct investment due to a strong consumer market, access to capital, and relatively low-cost, stable electricity. The strongest performers at the moment are aligned with the current presidential administration’s priorities, but even in less active sectors, investment can thrive if it is made with property guidance and an understanding of location and operating risks. Site Selection Group helps companies navigate these considerations to ensure each operator can move projects forward with confidence.