The number of jobs added in the United States from reshoring—that is, returning manufacturing and production of goods from overseas to where a firm was originally located—is on pace to hit almost 350,000 in 2022, according to a report published by the Reshoring Initiative.
That would be the highest number since the Reshoring Initiative, which lobbies to return manufacturing jobs to the United States, began tracking the data in 2010.
If the projected numbers turn out to be accurate, the total number of reshored jobs since 2010 will be more than 1.6 million.
Reshoring is outpacing FDI, which indicates that U.S.-based companies are beginning to understand the benefits of localized production, the report states. In the past decade, there has been a “strong surge” in manufacturing employment, reflecting the impact of a slowing rate of offshoring and a growing pace of reshoring, as well as FDI.
Supply-chain gaps and the push for greater self-sufficiency are major reasons driving the onshoring trend. The challenge of decoupling from China and a potential Taiwan–China conflict are “focusing those concerns.”
Social and ethical concerns are another factor contributing to reshoring decisions, specifically related to labor and human rights violations in China. Walmart’s $350 billion “Made in America” initiative, rising automation, increasing freight costs, and climate and sustainability considerations are other factors.
The desire to not lose intellectual property to offshore production is also driving many businesses to reshore some of their activities.
South Korea Top Source for Reshoring
Nationally, the top source for reshoring in 2022 was South Korea, at 35,403 jobs, followed by Vietnam, Japan, Canada, Germany, China, Netherlands, India, France, and Taiwan. Korea leads because of several companies announcing large FDI investments in the United States in electric vehicle (EV) battery production.Between 2010 and 2021, China cumulatively was the source of 44 percent of reshoring. In recent years, reshoring from China has been dropping. However, the Reshoring Initiative estimates that the actual number of jobs returning from China “is actually much greater” than reported.
In 2022, Kentucky is estimated to be the biggest beneficiary of reshoring, projected to receive 45,900 jobs, followed by North Carolina, and Georgia. All three states have large EV battery investments. California dropped from the top 20 list, while Texas tumbled from No. 1 to 13.
The rising rate of reshoring is evident from construction data, which reveal that companies are building more manufacturing facilities in the United States.
In January, UBS conducted a survey among C-suite executives that showed that more than 90 percent were looking to move manufacturing out of China or were in the process of doing so. Roughly 80 percent of them were considering relocating a part of that production to the United States.