Despite the present trade environment, interest is picking up for U.S. manufacturing.
The combination of reshoring and related foreign direct investments (FDI) in the U.S. jumped 52 percent compared to 2016, according to The Reshoring Initiative’s 2017 Reshoring Report.
This represented a 2,800 percent spike from 2010 and led to 171,000 jobs being added to the U.S. economy, the report noted.
Including upward revisions of 67,000 jobs in prior years, the total number of manufacturing jobs brought to the U.S. from offshore is over 576,000 since the low in 2010, the report noted. The 171,000 reshoring and FDI jobs announced equal 90 percent of the 189,000 total manufacturing jobs added in 2017. Data for the report came from the Reshoring Initiative Library of more than 5,000 published articles, privately submitted reshoring case studies and privately documented cases.
Apparel and Medical Equipment saw the largest increases in industry ranking, while Transportation Equipment remained the strongest overall industry, accounting for nearly 36 percent of total jobs returned.
According to the National Council of Textile Organizations, investment in fiber, yarn, fabric and other non-apparel textile product manufacturing has more than doubled to $2.1 billion in 2016 from $960 million in 2009.
The Reshoring Initiative largely attributed the increases to anticipation of greater U.S. competitiveness based on expected corporate tax and regulatory cuts following the 2016 election, which did occur. Similar to the previous few years, FDI continued to exceed reshoring in terms of total jobs added, but reshoring has closed most of the gap since 2015, according to the report.
“We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” Harry Moser, founder and president of the Reshoring Initiative, said. “With 3 to 4 million manufacturing jobs still offshore, as measured by our $500 billion per year trade deficit, there is potential for much more growth.”
The 2017 reshoring data showed that proximity to customers remained the leading factor driving reshoring and FDI in 2017, followed by image and branding of Made in USA, government incentives and supply chain synergies.
For the first time, Asia surpassed Western Europe in generating jobs by FDI, due mostly to increased investment by Chinese companies, and continued strong showings from Japanese and South Korean firms. In the apparel and textile sector, many foreign-owned companies have invested in facilities in places like the Carolinas, Georgia and Alabama, where the industry had once flourished.
The increase in reshoring at a similar rate as FDI indicates that U.S.-based companies are starting to understand the benefit of U.S. production that foreign companies have seen for the last few years, the report noted.