Reshoring -- the practice of businesses transferring manufacturing operations to the U.S. from foreign locations – has remained strong during the first half of 2020, despite the negative effects of the COVID-19 pandemic, according to a report by the Reshoring Initiative. “We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” according to 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.
From 2010 through 2019, according to the Initiative, over 900,000 announced new manufacturing jobs are attributable to reshoring and foreign direct investment (FDI.) Allowing for a conservative two-year lag, the trend will have resulted in 600,000 jobs, it estimated. “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,” it stated.
For 2019, combined reshoring and FDI announcements totaled more than 117,000 manufacturing jobs, which is the Initiative’s third highest pre-revision annual rate on record. Furthermore, 1,100 companies reporting new reshoring and FDI in 2019 represents the second highest annual level in history.
During the current year, job creation due to reshoring activity is exceeding that of foreign direct investment (FDI), the Initiative reported, adding that the same trend will continue to influence manufacturing growth and U.S. economic recovery in 2021.
Further, the Initiative observed that, due to the pandemic, during 2020 reshoring is outpacing FDI for the first time since 2014. “COVID uncertainty is causing companies to emphasize operations in their home countries,” according to a release.
Also continuing to reshoring activity is U.S. manufacturers’ determination to shorten or close supply-chain gaps for essential products – which is a notable factor in PPE, medical, technology, and defense manufacturing.
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, and includes cumulative data from 2010 through 2019, as well as projections from 2020 1st half data and provides data.
The full report is available for download.
