The number of companies reporting new reshoring and foreign direct investment (FDI) in 2018 is at the highest level in history, up 38% from 2017. The combined reshoring and related FDI announcements totaled more than 145,000 jobs, the second highest annual rate in history, said the Reshoring Initiative report. Including upward revisions of 36,000 jobs in prior years, more than 757,000 manufacturing jobs have been brought to the United States from offshore since the manufacturing employment low of 2010.
Allowing for a two-year lag from announcement to hire, the cumulative announcements since 2010 have driven 31% of the total increase in U.S. manufacturing jobs during that period and 3.3% of total end-of-2018 manufacturing employment of 12.9 million, said the report.
Reshoring Initiative largely attributes the increases to greater U.S. competitiveness due to corporate tax and regulatory cuts. Similar to the previous few years, FDI continued to exceed reshoring in terms of total jobs added, but reshoring has closed most of the gap since 2015.
“We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” said Harry Moser, founder and President of Reshoring Initiative. “With five 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. Our Competitiveness Toolkit is available to help quantify the impact of policy alternatives, including a stronger skilled workforce, continued corporate tax and regulatory reductions as well as a lower U.S. dollar,” said Moser.
Looking deeper into the published data, the Reshoring Initiative notes:
- Reshoring from China accounts for 59% of all reshoring.
- Although China topped Germany for the greatest number of FDI jobs announced since 2010, China announced 12% fewer in 2018 than in 2017.
- Quality, freight cost and total cost make up the top offshore drivers of the trend.
- Proximity to market, government incentives, supply chain optimization, higher productivity, skilled workforce, and brand image/made in USA serve as the top domestic drivers.
- Reshoring has been increasing at a similar rate as FDI, indicating that U.S. headquartered companies are starting to understand the U.S. production benefit that foreign companies have seen for the last few years.
Read the full report: Reshoring Initiative 2018 Data Report: Second Highest Year on Record.