U.S. manufacturing is experiencing a revitalization. After years of anemic growth due to companies outsourcing their operations and exporting employment opportunities to foreign markets, manufacturing across different sectors is entering a boom period. Since the coronavirus pandemic, when the global public health crisis resulted in a worldwide supply chain disaster, many developments have supported this resuscitation within the United States. Companies have adopted reshoring initiatives and started waving goodbye to China, buoyed by public policy encouraging this trend, and the Chinese market no longer serving as an advantage amid geopolitical tensions and rising labor costs.
But is this a short-term boost or a long-term push?
“This boom is real,” said Scott Paul, president of the advocacy group Alliance for American Manufacturing, in an interview with American Essence. “The trend is clear. The data shows that manufacturing is definitely for the U.S. market and is definitely headed out of China.”
In addition to the current administration’s massive investments to attract domestic manufacturing in critical sectors like chipmaking, state governments are aggressively employing their own incentives, from workforce training and community college partners to tax incentives and infrastructure investment for companies that set up manufacturing locally, Paul noted.
Rosemary Coates, executive director at the Reshoring Institute, which conducts research and advises companies looking to reshore, told American Essence that the country’s manufacturing sector could be creating as many as 200,000 jobs annually in the coming years. She also alluded to an analysis of S&P 500 companies’ earnings call transcripts that found mentions of “reshoring” went up 128 percent in the first quarter of 2023 compared to the same period a year ago. “It’s a very popular idea and an awful lot of [companies are] attempting to reevaluate their global strategy,” said Coates.
While this is a national push, experts say some markets are witnessing concentrated manufacturing growth.
A recent study found that Elkhart, Indiana, is a popular jurisdiction for manufacturing because the metro area is ranked eighth in the entire country for semiconductor workforce readiness. The northern Indiana region maintains a substantial inventory of assemblers, fabricators, setters, operators, production supervisors, and operating workers.
Meanwhile, Enel North America, a global green energy firm, announced a $1 billion investment in constructing a new solar panel manufacturing facility at the Tulsa Port of Inola in Oklahoma because of “the state’s commitment to workforce development and an attractive investment climate.”
Overall, these types of investments being made by federal, state, and local governments are “game changers,” said Paul, which is why it is happening across the country.
Elkhart, Ind.
Elkhart is home to several manufacturing sectors, especially strong in electronics and robotics. Employment in manufacturing has swelled 8 percent since the pandemic.
Houston, Texas
Houston maintains a robust manufacturing base—it ranks second in U.S. metro areas for manufacturing GDP—with an especially notable expansion of energy-related manufacturing. RS Technologies announced in May a new manufacturing facility for electric grid technology that will employ 400 workers.
Lexington, Ky.
Lexington maintains a diverse manufacturing sector in a wide array of areas, from automobiles to industrial metals. It possesses a vast defense manufacturing industry, led by Lockheed Martin, which maintains a workforce of more than 1,000 employees. Overall, the state’s manufacturing sector employs nearly 32,000 employees, up 7 percent from before the pandemic.
Reno, Nev.
Reno has highly benefited from the U.S. and global push to green energy, attracting some of the largest brands in the world, including Tesla. The company announced a $3.6 billion expansion into its battery and truck manufacturing there, hiring about 3,000 workers.
Tulsa, Okla.
Tulsa is home to many solar energy firms. After Enel’s $1 billion investment and Tesla Energy’s massive presence, industry experts anticipate more growth in the coming years. Enel said it hopes to bring “Oklahoma to the forefront of renewables manufacturing.”
Some Manufacturing Statistics:
All of the U.S. manufacturing jobs that were lost during the pandemic have been recovered. In fact, manufacturing employment is up 2 percent from before COVID-19, totaling close to 13 million job positions.
Real (inflation-adjusted) manufacturing construction spending has doubled since the end of 2021. In the first quarter of 2023, real manufacturing spending averaged $166 billion. By comparison, this figure was $85 billion between 2005 and 2022. The growth has been broad-based, too, with the largest gains situated in computer, electrical, electronics, chemical, transportation, and food, beverage, and tobacco.
Consulting firm Kearney’s 10th Annual Reshoring Index Report found that 96 percent of U.S. CEOs are evaluating the potential to reshore their operations, up from 78 percent in 2022.
This article was originally published in American Essence magazine.
