Reshoring Trend Boosts US Manufacturing Growth
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Reshoring Trend Boosts US Manufacturing Growth

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CEO Insight Minute: Can My Company Benefit from the US Reshoring Trend?

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CEO Insight Minute: Can My Company Benefit from the US Reshoring Trend?

Construction spending on manufacturing facilities is up 40% y-o-y and 62% over the past 5 years. Here are 6 factors to consider before deciding to reshore.

Companies are building new manufacturing facilities in the US at a pace not seen in decades, recognizing the value of reshoring production after several years of supply chain bottlenecks, rising transportation and labor costs, US tariffs on China, and geopolitical tensions.

Trusted Insights for What's Ahead™

[1] Bridget McCrea, Supply Chain Design Meets the Reshoring Trend, Supply Chain Management Review, March 2, 2023.

[2] US Census Bureau, Monthly Construction Spending, September 2023, November 1, 2023.

Companies are building new manufacturing facilities in the US at a pace not seen in decades, recognizing the value of reshoring production after several years of supply chain bottlenecks, rising transportation and labor costs, US tariffs on China, and geopolitical tensions.

Trusted Insights for What's Ahead™

  • Onshoring offers a “best cost” supply chain strategy versus a “low cost”1 one for many manufacturers after consideration of five key business factors.
  • Interest in onshoring and reshoring accelerated at the beginning of the COVID-19 pandemic and reaccelerated in late 2021 in the wake of continued supply chain pressures and emerging industrial policies.
  • Construction spending on manufacturing increased 40% in 2022 compared to 2021, and the growth continues in 2023, with September spending 62% higher than the same month last year.2
  • Manufacturers are focusing on producing electrical equipment and more complex components, taking advantage of automation and the design of “smart” manufacturing facilities to offset labor costs.
  • The Sunbelt is experiencing the greatest growth in manufacturing construction, due to the region’s availability of land, state and local government incentives, and a growing skilled population.

[1] Bridget McCrea, Supply Chain Design Meets the Reshoring Trend, Supply Chain Management Review, March 2, 2023.

[2] US Census Bureau, Monthly Construction Spending, September 2023, November 1, 2023.
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Author

Erin McLaughlin

Erin McLaughlin Erin McLaughlin

Senior Economist, ESF Center
The Conference Board

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