Reshoring Initiative 1H2020 Report Projects Increased Reshoring Despite Pandemic
According to the report, reshoring will continue to be key to manufacturing growth and to U.S. economic recovery in 2021 and beyond, including 2020 jobs, which are projected to reach 110,000.
The Reshoring Initiative’s 1H2020 Data Report, which was released on Nov. 19, is projecting positive feedback from 2020. According to the report, despite COVID-19, reshoring is up in 2020, and job announcements for 2020 are projected to reach 110,000, which will bring the total since 2010 to more than one million by year’s end.
In 2020, reshoring has also been exceeding foreign direct investment (FDI) in job creation. The report adds that reshoring will continue to be key to manufacturing growth and to U.S. economic recovery in 2021 and beyond. From 2010-2019 more than 900,000 reshoring and FDI manufacturing jobs have been announced. Allowing for a conservative two-year lag, more than 600,000 will have been hired. This figure accounts for 44% of the 1.41 million increase in U.S. manufacturing jobs since the manufacturing employment low in 2010, and 5% of total Dec. 31, 2019 manufacturing employment of 12.9 million.
The 2019 combined reshoring and FDI announcements totaled more than 117,000 manufacturing jobs says the report, the third highest pre-revision annual rate on record. Additionally, the number of companies reporting new reshoring and FDI in 2019 was at the second highest annual level in history, at 1,100 companies. The numbers, contends the Reshoring Initiative, demonstrate that reshoring and FDI are major contributing factors to the country’s rebounding manufacturing sector.
About the Report
The Reshoring Initiative’s 1H2020 Data Report contains data on U.S. reshoring and FDI by companies that have shifted production or sourcing from offshore to the United States. The report includes cumulative data from 2010-2019, as well as projections from data cumulated from the first half of 2020, and provides data and analysis in 10 categories, ranging from the number of manufacturing jobs gained, to reasons cited for reshoring, to a breakdown of data by industry, country, region and state. See the full report here.
Here are some additional takeaways from the report:
- Due to the pandemic, in 2020 we are seeing U.S. reshoring outpacing FDI for the first time since 2014. COVID-19 uncertainty is causing companies to emphasize operations in their home countries.
- The national demand to shorten and close supply chain gaps for essential products to make the U.S. less vulnerable is most likely to benefit the following industries: PPE, medical, tech and defense. Already, 60% of cases after March 2020 mention the pandemic as a factor in reshoring decisions.
- Going forward, we believe President Biden will prioritize reshoring highly but apply different methods than President Trump.
- There is continued growth in efforts by MEPs, EDOs and states to enable reshoring. The Reshoring Initiative is deeply involved in these efforts. By year’s end, it will be working with 50 or more companies to reshore about 100 products. As a measure of corporate interest, the demand for this service is more than 20 times the rate of 2019.
“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, founder and president of the Reshoring Initiative. “With 5 million manufacturing jobs still offshore, as measured by our $800 billion/year goods trade deficit, there is potential for much more growth. We call on the administration and Congress to enact policy changes to make the United States competitive again.”