In last week’s Talent Talk, we discussed just how hot the job market continues to be, despite some concerning macro-economic numbers and the possibility of a historic 100 basis point rate hike in July. We also promised that we would look at the forces that will continue to drive the labor market. The first force is so powerful that it merits its own discussion.
Americans have awoken to the fact that we went too far in offshoring production vital to our interests and well-being, and CEOs are hearing that, too. The war in Ukraine, port bottlenecks, and soaring shipping costs have poured fuel on the fire. For two years we have been discussing, contemplating, and planning to bring back manufacturing to the United States. Everyone knew this would take some time, but that time has come.
US construction of new manufacturing facilities has soared 116% over the past year, according to Dodge Construction Network. Some of the industries gathering the biggest headlines include semiconductors, transportation equipment, and appliances. One of the beautiful things about the plastics industry is that we supply many industries and end markets.
Earlier this year, a survey of C-suite executives by investment banker UBS showed that more than 90% who had operations in China were in the process of moving production or had plans to do so. Most of that is slated to return to the United States, while Mexico is also a popular destination.
This is a long-term commitment on the part of the US manufacturing community that will impact jobs for decades to come. According to industry sources, in 2020 the US reshored a record 160,000 jobs. That record did not stand long. In 2021 the number swelled to 261,000, and in 2022 it is projected at around 400,000.
According to Harry Moser, founder and President of the Reshoring Initiative, the labor shortage is putting a ceiling on the number of overseas manufacturing jobs we can absorb each year, so we may be nearing our annual limit. But should other sectors react to short-term economic hurdles by eliminating jobs, manufacturing and the plastics industry will be all too happy to be the beneficiary.
About the author
Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].