July 2017
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Reshoring Works
U.S. Nets Manufacturing Jobs in 2016

By Natasha Mosquera, Staff Intern

After several decades, the United States is finally experiencing the return of manufacturing, with domestic jobs outnumbering those that went offshore in 2016. According to the Reshoring Initiative 2016 Data Report, the combined reshoring and foreign direct investment trends grew by over 10 percent in 2016, adding 77,000 jobs, tying the 2014 record and exceeding the rate of offshoring by about 27,000 jobs.

The 2016 results show that more than 338,000 manufacturing jobs have been brought back from offshore since the manufacturing employment low of February 2010. These numbers are proof that reshoring and FDI play large roles in aiding the recovery of the country’s manufacturing sector, one leading advocate says.

“We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” says Harry Moser, who founded the Reshoring Initiative in 2010. “With 3 to 4 million manufacturing jobs still offshore, as measured by our $500 billion per year deficit, there is potential for much more growth.”

To help accelerate this trend and combat the challenges of bringing back all the 3 to 4 million manufacturing jobs cumulatively lost to offshoring, government policy changes and their expectations are vital.

“We call on the administration and Congress to enact policy changes to make the United States competitive again. Our Competitiveness Toolkit is available for them to quantify the impact of policy alternatives, including: stronger skilled workforce; lower corporate taxes and regulations; and lower U.S. dollar,” says Moser, who was a 50-year manufacturing industry veteran and president of GF AgieCharmiles before founding the initiative, which focuses on the business case for reshoring.

Looking deeper at the data, Moser highlights a few key takeaways from this year’s report:
  • Proximity to customers was the leading factor for returning manufacturing 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 percent 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.
  • Preliminary 2017 data trends are looking to be at least as good as 2016.

In its continuous effort to boost reshoring, the Reshoring Initiative is working together with Return One Million Jobs, a project that was created to raise $20 million to bring one million manufacturing jobs back to the USA. The project will utilize global data analytics to help companies compare the total cost of supplying the U.S. market through offshoring vs. manufacturing domestically.

While lower labor rates were the initial reason tens of thousands of manufacturers relocated production, Carl Carstensen, the leader of ROMJ, says total cost comparisons today may encourage as many as 25 percent to return jobs to the U.S. Moser says not only will this joint action dramatically increase the promotion of reshoring, but also the combination of ROMJ’s resources and the Initiative’s tools will make one million jobs attainable.

To further motivate more companies to reevaluate their location decisions, the Reshoring Initiative, along with the Precision Metalforming Association, have launched the first National Reshoring Award.

The award is created for companies that have successfully reshored parts or tooling made primarily by metal forming, fabricating, or machining. Companies that have returned manufacturing from outside North America between Jan. 1, 2012, and Aug. 1, 2017 are eligible to apply for the award. There will be one award for buyers and one award for suppliers. Applications must be submitted by Aug. 1. To view award details and enter to win, visit www.pma.org/sourcingsolutions/reshoring.asp.

Moser says the Reshoring Initiative hopes that other associations will choose to support similar awards to recognize that their industries are now successfully reshoring.

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Monday, December 18, 2017