Mhlnews 7104 Reshoring 2 1
Mhlnews 7104 Reshoring 2 1
Mhlnews 7104 Reshoring 2 1
Mhlnews 7104 Reshoring 2 1
Mhlnews 7104 Reshoring 2 1

Reshoring Exceeded Offshoring in 2016

May 22, 2017
Some reasons for the increase in reshoring are: proximity to customers, government incentives, skilled workforce availability and ecosystem synergies.

For the first time in decades, more manufacturing jobs are returning to the U.S. than are going offshore, according to the “2016 Reshoring Report,” by the Reshoring Initiative.

The combined reshoring and foreign direct investment (FDI) trends grew by over 10 % in 2016, adding 77,000 jobs (tying the 2014 record) and exceeding the rate of offshoring by about 27,000 jobs.

The 2016 results bring the total number of manufacturing jobs brought back from offshore to more than 338,000 since the manufacturing employment low of February 2010.

The rate of job return announcements doubled in November 2016 and hit an all-time peak monthly record in January 2017

In comparison to 2000-2003, when the U.S. lost, net, about 220,000 manufacturing jobs per year to offshoring, 2016 achieved a net gain of 27,000. The tide has turned, the group said with the numbers demonstrate that reshoring and FDI are important contributing factors to the country’s rebounding manufacturing sector.

Some of the factors that caused the increase is the anticipation of potential policy changes that will make the U.S. more competitive, continued rising wages overseas, and increased use of total cost of ownership for sourcing decisions.

"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, president of the Reshoring Initiative.

The group points out, however, that there are “still huge opportunities and challenges  to  bringing back all the 3 to 4 million manufacturing jobs cumulatively lost to offshoring.”

To address this Moser said that he wants the "administration and Congress to enact policy changes to make the U.S. competitive again."

Moser offers ups his group's Competitiveness Toolkit which will help is quantify the impact of policy alternatives, including: stronger skilled workforce; lower corporate taxes and regulations; and lower U.S. dollar.

 The reports looked into a variety of issues affecting reshoring. Here are some highlights:

• Proximity to customers was the leading factor in 2016, followed by government incentives, skilled workforce availability and ecosystem synergies.

• The Southeast and Texas remain the top regions for reshoring and FDI, with the Midwest in second place due to its strong industrial base. 

• Transportation equipment remained the strongest industry, accounting for nearly 40% of total jobs returned.

• Plastics/rubber and furniture saw the largest increases in industry ranking.

• FDI has remained stronger than reshoring. Both trends are based on the logic of producing in the local market, otherwise known as localization.

• Preliminary 2017 data trends are looking to be at least as good as 2016.

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