Australia's global appeal as an investment destination continues as the total stock of foreign direct investment (FDI) rose 11.3% during 2006 to A$315.47 billion, according to the most recent data from the Australian Bureau of Statistics.

Total investment inflows during 2006 increased substantially, reflecting Australia's growing stake in the world economy," said Fred Welz, Senior Investment Commissioner for North America. [Chart Available]

"Key investment drivers have been Australia's economic performance, political stability and proximity to Asia,” Welz said.

"Australia is now in its 16th year of uninterrupted economic growth. The OECD forecasts Australia’s economic growth to be 3.3% in 2007 and 2008, well above a forecast average OECD growth rate of 2.7%.

"With the Asia-Pacific expected to account for 45% of the world's GDP by 2015, Australia is also a destination of choice for USA companies looking for a strong and stable base in the region," said Welz.

"Australia’s time zone advantages, its proximity to Asia and its American business environment make it a perfect business bridge to the rapidly expanding markets of China and India,” he said.

The USA is still ranked as the largest single source of FDI stock for Australia, representing 23.3% (AUD$73.6 billion) of the total in 2006, an increase of 6.8% over the five years to 2006. The stock of total investment from the US now stands at $362.8 billion, representing over one quarter of investment into Australia.

While the USA remains Australia's number one source of total investment, FDI inflows and stock, in 2006 greater investment from Europe was the major driver of the overall increase in total stock of FDI in Australia, seeing increased investment from France, Germany, Switzerland and the UK. Total stock of foreign direct investment from the European Union was up 8% (AUD$107.1 billion) in 2006, and now accounts for 34% of Australia's FDI stock.

The increase in investment that Australia is experiencing from the EU demonstrates that the country is increasingly becoming more and more attractive for investors looking for Asia-Pacific based investment.

Likewise, as China and India look to Australia to secure energy supplies, USA investors should monitor investment opportunities in Australia's energy and resources markets.

"All eyes will be on Australia in early September when it hosts the next APEC summit in Sydney. Australia will play a key role in improving and securing clean energy supplies for the Asia-Pacific region," said Welz.