#181072969@ Melitas | Dreamstime
Reshoring Creating Record Amount of Jobs

Reshoring Creating Record Amount of Jobs

July 12, 2024
In 2023, job announcements due to reshoring and foreign investment reached 287,000.

The Reshoring and FDI trends continue to grow, driven by increasing global risks. Supply chains today face numerous disruptions, from political tensions and regional conflicts to climate change and extreme weather events.

This is according to the Reshoring Initiative  which announced on July 9 that in 2023 job announcements due to reshoring and FDI reached 287,000, the second highest year on record. 

These factors, combined with economic uncertainties, underscore the need for resilient and adaptable supply chain strategies to navigate an increasingly unpredictable global landscape. Investment in U.S. manufacturing has also been rising, with a key focus on shortening supply chains.

Trend Highlights:

Significant growth has been noted in “essential” industries supported by the Inflation Reduction Act (IRA) and other government subsidies, particularly in EV batteries, semiconductor chips, and solar energy. These products drove about 39% of the announced jobs in 2023.

As government subsidies run out, new reshoring and FDI announcements are slowing. The Congressional Budget Office just upped the budget deficit estimate for 2024 25% to $2 trillion and annually thru 2034 to 5.5% of GDP. Future progress will depend on new policies that make U.S. manufacturing cost competitive, rather than subsidize specific industries.

Skilled workforce is another top factor. The success or failure of training millions of workers could skew the outcome of the current reindustrialization momentum, in either direction. Trends are moderately positive, e.g. manufacturing apprenticeships up 83% in the last 10 years.

With the majority of job announcements and investment, the Southern U.S. remains the most competitive manufacturing region, offering a blueprint for the rest of the country to follow.

Nearshoring and trade with allies are becoming more prevalent in the shifting global dynamics.

Wall Street is embracing reshoring, with mentions in earnings calls up sharply and a 300% increase in spending on reshoring and FDI data.

Geopolitical Risk is a top driving force in the reshoring and FDI trends.

  • Europe: Russia’s attack on Ukraine was and still is expected to drive FDI from Europe to the U.S. due to natural gas and electricity availability and pricing. The trend in reshoring and FDI from Europe is increasing again after a dip during the pandemic years. In 2021 and 2022 European origin cases constituted 13% of the total jobs announced compared to 34% in 2023 and a projected 37% in 2024.
  • Israel: The October 7 Hamas attack was too late in 2023 to impact 2023 da-ta, but we anticipate it will have a ripple effect across various industries with broad economic and supply chain disruptions that will influence costs, availability of materials, and production schedules.
  • Taiwan: U. S. Chinese tension has been mounting for several years. Geopoliticians and corporate strategists are anticipating reshoring as insurance.
  • China: China has the highest combination of huge trade dependency, single sourcing and geopolitical risk. Reshoring and FDI from China are near historical highs, with reshoring alone at an all-time high of 87%.

Latest from Global Supply Chain

#21607252@Nickondr|Dreamstime
Manufacturing Outlook for 2025
#330301947@Valiantsin Suprunovich|Dreamstime
Record Number of  Thanksgiving Holiday Shoppers