Closely related to real estate transactions is the construction industry. Typically, students of multinational enterprise have found construction to be an industry that does not attract direct foreign investment, because (a) generally, construction companies are local firms; (b) problems of construction (getting zoning and building permits, obtaining local materials from local suppliers, and hiring skilled carpenters and plumbers, for example) require local expertise; and (c) the barriers to entry for local firms are low. The vast majority of construction for the various non-U. S. real estate projects is done by local businesses. There are exceptions; we have noted several non-U. S. developers who participate in construction.
It seems evident that many foreign investments stimulate the construction industry, though they may not actually be a part of it. We will also see in chapter 5 that a number of non-U. S. firms manufacture products related to construction: various types of insulation, plastic pipe, vinyl sidings, cement, concrete, and roofing materials. And there are two foreign companies which build greenhouses.
Foreign investments in Florida land and real estate are rising rapidly and significantly, involving more non-U. S. monies than any other sector of the Florida economy. In 1974-1975, about 75 per cent of the land transactions in south Florida were attributed to foreign investors. 56 In 1976, foreign investors picked up many distress condominiums, both buildings and units. In 1977, reporters credited the improvements in the real estate market in Dade County to "the continued activities of offshore investors." Nowhere in the state are non-U. S. land and real estate investments as large as those in south Florida. Investments in land for development and in real estate are far more important than stakes in land for agricultural use. The investments aid the construction industry, where there is also some non-U. S. investment; however, much of the work is done by Florida businesses.
Investors in raw land desire to move money from their home countries to a secure location and invest in an appreciating asset. Latin Americans have sought to diversify their existing investments, to transfer money from economically and possibly politically insecure countries abroad, and to avoid the problems of high inflation in their home nations. Europeans see more reasonably priced land investments in the United States than elsewhere, worry about the rise of communist and socialist movements in Europe, and recognize that inflation is less in the United States than in most of Europe. Many Canadians in recent times have looked to foreign investments because their opportunities at home seem limited, the political situation is uneasy, and the 1976-1977 reces-