#102 – Inside Our Industry – The Robust Rise of ReshoringPosted on | Inside Our Industry
Reshoring continues to gain ground in the U.S., with the South and Southeast leading the way in terms of jobs, according to the Reshoring Initiative’s latest report.
The Robust Rise of Reshoring
June 3, 2022, Anna Smith, IndustryWeek.com
The total number of reshoring and foreign direct investment jobs announced since 2010 is now over 1.3 million, according to a report.
Reshoring and foreign direct investment (FDI) job announcements hit a record 261,000 in 2021, according to the Reshoring Initiative’s 2021 Data Report.
According to the report data, reshoring exceeded FDI by 100%—a change from 2014 through 2019, when FDI exceeded reshoring—and the number of companies reporting reshoring and FDI projects set another record of over 1,800 companies.
“The year-over-year increase is due almost exclusively to companies filling supply chain gaps of essential products including: electric batteries, semiconductors, PPE, pharmaceuticals, rare earths and renewable energy,” according to the report.
Government incentives, skilled workforce availability/training and under-utilized capacity accounted for the top positive domestic factors that have attracted companies to the United States while supply chain interruption, green considerations and quality/rework/warranty issues were the top negative factors.
For 2021, Texas and Tennessee led in the number of jobs announced, further securing the South as the U.S. region scoring the most reshoring and FDI jobs compared to the Midwest, West and Northeast. From 2010 to 2021, the South has accounted for more than half of the total reshoring and FDI jobs at 56%.
When looking at reshoring by international region from 2010 through 2021, most projects are moving from Asia, which accounted for 63% of the total number of jobs reported. However, the report’s authors said, “About 75% of Reshoring cases do not report Country or International Region From. We expect the true percentage from Asia is higher.”
As for what is happening and what is to come in 2022, the report says results will be heavily influenced by COVID and the Russia-Ukraine war. It also seems that disrupted supply chains can both help and hurt reshoring efforts: In its list of factors that may impact 2022 decisions, the report states that disrupted supply chains are likely to slow reshoring while also recognizing that supply chain gaps may lead to reshoring plan and help FDI.
Overall, “The rate of reshoring plus FDI job announcements in 2021 was up 46% from 2020 and over 4000% from the 2010 rate. The resulting cumulative 860,000 incremental hires represent about 7% of U.S. manufacturing employment,” according to the report.
With the continuous upward trend of the past few years and the recognizable push for reshoring production, it comes as no surprise that the report predicts that 2022 reshoring and FDI jobs announced will come in around 400,000. However, it seems that this number will be dependent on the climate of (still) largely unpredictable factors and criteria.