Thankfully, the “New Normal” I wrote about here in the May 2020 issue did have an expiration date after all. There may not be a specific calendar date to point to. But rush hour traffic resembles pre-pandemic volumes, people are traveling in droves — even if masks are still required on planes — and real estate occupancy rates are on the rebound. These and other factors will vary geographically, but they’re clearly trending in the right direction.
I’m even more optimistic about some economic trends regarding reshoring of operations I came across. The 2021 State of North American Manufacturing Annual Report from Thomas, the New York-based industrial sourcing and marketing platform, says 83% of North American manufacturers are likely or extremely likely to reshore production, up from the 54% of survey respondents who said they planned to reshore back in March 2020.
The automotive and oil & gas sectors were the most motivated verticals with plans to add North American suppliers to their supply chains, the report argues. Most notable, this shift toward reshoring will lead to a massive amount of economic opportunity in the U.S., with the potential to drive $443 billion in economic value over the next 12 months.
The Reshoring Initiative’s 2020 Data Report also has good news on this front. Despite COVID, it notes, reshoring numbers were up in 2020. Reshoring and foreign direct investment (FDI) job announcements for 2020 were 160,649, bringing the total jobs announced since 2010 to over 1 million (1,057,054). Also of significant importance: Reshoring exceeded FDI by nearly 100% for the first time since 2013.
Two more takeaways: (1) In order to make the U.S. less vulnerable, there are now national initiatives to shorten and close supply chain gaps for essential products. The PPE, medical, tech and defense industries are most likely to benefit. Medical equipment and PPE are the first responders of new reshoring and FDI, with cases up nearly 2,000% and jobs up 400% from 2019; and (2) It’s expected that 2021 reshoring and FDI job announcements will be near 200,000, up by at least 25%.
“With 5 million manufacturing jobs still offshore, as measured by our $900 billion/year goods trade deficit, there is potential for much more growth,” says Harry Moser, founder and president of the Reshoring Initiative. “We call on the administration and Congress to enact policy changes to make the United States competitive again.”
We second the motion.
Till next time,
Mark Arend, Editor in Chief
