In 2020 reshoring is exceeding foreign direct investment (FDI) in job creation. Reshoring will continue to be key to manufacturing growth and to U.S. economic recovery in 2021 and beyond. From 2010 through 2019 over 900,000 reshoring and FDI manufacturing jobs have been announced. Allowing for a conservative two-year lag, over 600,000 will have been hired. This figure accounts for 44% of the 1.41 million increase in U.S. manufacturing jobs since the manufacturing employment low in 2010, and 5% of total 12/31/19 manufacturing employment of 12.9 million.
The 2019 combined reshoring and FDI announcements totaled more than 117,000 manufacturing jobs, the third highest pre-revision annual rate on record. Additionally, the number of companies reporting new reshoring and FDI in 2019 was at the second highest annual level in history, 1,100 companies. The numbers demonstrate that reshoring and FDI are major contributing factors to the country’s rebounding manufacturing sector.
The Reshoring Initiative’s 1H2020 Data Report contains data on U.S. reshoring and FDI by companies that have shifted production or sourcing from offshore to the United States. The report includes cumulative data from 2010 through 2019, as well as projections from 2020 1st half data and provides data and analysis in 10 categories, ranging from the number of manufacturing jobs gained, to reasons cited for reshoring, to a breakdown of data by industry, country, region and state.
Top Takeaways from the Report:
• Due to the pandemic, in 2020 we are seeing U.S. reshoring outpacing FDI for the first time since 2014. COVID uncertainty is causing companies to emphasize operations in their home countries.
• The national demand to shorten and close supply chain gaps for essential products to make the U.S. less vulnerable is most likely to benefit the following industries: PPE, medical, tech, and defense. Already, 60% of cases after March 2020 mention the pandemic as a factor in reshoring decisions. • Going forward, we believe President Biden will prioritize reshoring highly but apply different methods than President Trump.
• There is continued growth in efforts by MEPs, EDOs and states to enable reshoring. The Reshoring Initiative is deeply involved in these efforts. By year’s end we will be working with 50 or more companies to reshore about 100 products. As a measure of corporate interest, the demand for this service is more than 20X the rate of 2019. Companies are doing their best to reshore, and we are here to help.
“We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” said Harry Moser, founder and president of the Reshoring Initiative. “With 5 million manufacturing jobs still offshore, as measured by our $800 billion/year goods trade deficit, there is potential for much more growth. We call on the administration and Congress to enact policy changes to make the United States competitive again. Our Competitiveness Toolkit is available to help quantify the impact of policy alternatives, including a stronger skilled workforce, competitive corporate tax and regulatory structures and a lower U.S. dollar.”
See the full report at https://drive.google.com/file/d/1INgYSrE3i_3ZPH26-WYFLhkBhQC0yOvK/view. For more information, visit www.reshorenow.org.