Report Indicates Reshoring Up Despite COVID-19
The Reshoring Initiative’s latest Data Report indicates that job announcements for 2020 were projected to reach 110,000.
The latest Reshoring Initiative Data Report indicates that reshoring is up despite COVID-19 and that reshoring may be key to a strong recovery in 2021 and beyond. Job announcements for 2020 were projected to reach 110,000, which would bring the total since 2010 to over 1 million by the end of 2020.
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 through 2019, as well as projections from 2020 first half data, and provides data and analysis in 10 categories, including the number of manufacturing jobs gained, reasons cited for reshoring and a breakdown of data by industry, country, region and state.
“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.”
In 2020, reshoring was exceeding foreign direct investment (FDI) in job creation. According to the report, data indicates that reshoring will continue to be key to manufacturing growth and to U.S. economic recovery in 2021 and beyond. From 2010 through 2019, over 900,000 reshoring and FDI manufacturing jobs were announced. Allowing for a conservative two-year lag, over 600,000 should 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 the total Dec. 31, 2019 manufacturing employment of 12.9 million.
The 2019 combined reshoring and FDI announcements totaled more than 117,000 manufacturing jobs, the third highest pre-revision annual rate on record. Additionally, the 1,100 companies reporting new reshoring and FDI in 2019 was at the second highest annual level in history. The numbers demonstrate that reshoring and FDI are major contributing factors to the country’s rebounding manufacturing sector.
Top takeaways from the report indicate that, due to the pandemic, in 2020 we were seeing U.S. reshoring outpacing FDI for the first time since 2014. COVID uncertainty is causing companies to emphasize operations in their home countries. Also, 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, technology and defense. Already, 60% of cases after March 2020 mention the pandemic as a factor in reshoring decisions.