'89 FOREIGN INVESTMENT IN US FELL

'89 FOREIGN INVESTMENT IN US FELL

Foreign direct investment in the United States last year was $64.6 billion, down from 1988's $72.7 million but well above outlays in earlier years, the Commerce Department said Tuesday.

It said in a preliminary report that British companies continued to lead in direct investment, with purchases worth $22 billion last year. Japan was second with $14.9 billion.The department said outlays increased at an average annual rate of 55 percent from 1983 to 1988. In 1983 foreign direct investment was $8.1 billion.

The department said that increased investment was prompted by the low cost of investment funds, a depreciated dollar, the wealth of the U.S. market and concern that protectionist sentiment might reduce access.

Most investments were in chemicals and chemical products, the department said, with service industries and retail trade following.

The biggest purchasers last year, after Britain and Japan, were Australia, $4.5 billion; Canada, $3.9 billion; the Netherlands, $3.3 billion; France, $3.1 billion, and West Germany, $2.5 billion.