Reshoring, FDI Reaches New High in 2018
By Metal Center News Staff
on May 29, 2019
The number of companies that announced reshoring and Foreign Direct Investment in the U.S. reached a new high in 2018, reports the Reshoring Initiative in its latest report. The total reached 1,389 companies last year, a 38 percent increase from the prior year.
Reshoring and FDI added 145,000 new jobs. Coupled with an additional 36,000 in revisions to the years 2010 through 2017, the total of announced manufacturing jobs brought back to the U.S. since 2010 is more than 757,000.
Although the 2018 number of jobs announced was down 15 percent compared to 2017’s pre-revision rate, it is the second highest annual rate on record. The continued strength in jobs and number of companies demonstrates a tangible shift in corporate decision making that is likely to propagate the trend of reshoring and greater localization into the future, the report suggests.
“We believe the continued increases are largely based on greater U.S. competitiveness due to corporate tax and regulatory cuts and increased recognition of the total cost of offshoring,” the report’s authors say.
In 2015, the Reshoring Initiative determined parity was reached between offshoring and returning jobs. The following year, for the first time since the 1970s, the U.S. reshored more jobs than it lost to offshoring. The U.S. went from losing net about 220,000 manufacturing jobs per year at the beginning of the last decade to adding net 30,000 jobs in 2016.
There is still plenty of room for improvement, the report determines.
“When measured by our trade deficit of about $500 billion per year, there are still three to four million U.S. manufacturing jobs offshore at current levels of U.S. productivity, representing a huge potential for U.S. economic growth. Measured by our $800 billion non-petroleum goods trade deficit, there are about five million still offshore.”