Reshoring and FDI Jobs Increase a Record 53% at the End of 2022
The Reshoring Initiative’s quarterly report for 4Q 2022 reveals a massive increase in manufacturing jobs due to reshored production facilities in North America. That trend is bolstered by new facilities supported by government investment. 4Q job announcements were accelerated by the Chips and Infrastructure Acts and deglobalization trends.
Industrial job announcements in 4Q 2022 were at the highest rate ever recorded, about 15% above Q1 2022, the previous record. 4Q numbers were strong enough to give 2022 a total of 350,000+ jobs.
Here are the top takeaways from the report:
- Projected 350k reshoring jobs announced for 2022
- EV batteries make electrical equipment the top industry
- Private and federal entities are investing in skilled workforce development, one of the top barriers to success
- With the IRA, Chips Act, and Infrastructure Bill, the US Government is getting started on an industrial policy.
This chart shows reshoring on an upward trajectory for the past decade. Yet the period starting with the pandemic reveals a stunning increase. This is likely the result of the supply chain collapse during the pandemic and manufacturers’ eager work to solve this problem by bringing supply closer to production.
Supply Chain Gaps Need Further Closing
Supply chain gaps that erupted during the pandemic showed the need for greater self-sufficiency among North American manufacturers. That set the stage for the current upward trend in reshoring, according to the Reshoring Initiative. The risks of a Taiwan-China conflict or China voluntarily decoupling became a major concern. “Destabilizing geo-political and climate forces have brought to light our vulnerabilities and the need to address them. The White House responded with the Inflation Reduction Act, Chips Act, and the Infrastructure Bill, offering some direction and financial security to the companies and industries intent on filling the gaps,” read a statement in the report.
The report went on to say that government actions are necessary for the short run but are not sufficient since they do not improve the U.S. uncompetitive cost structure. The report’s editors noted that true industrial policy would level the cost playing field via comprehensive actions such as massive skilled workforce investments, a 25% lower US dollar, and the retention of immediate expensing of capital investments.
Harry Moser, the founder and president of the Reshoring Initiative, noted that “The current actions and momentum are a great start. A true industrial policy would accelerate the trend and increase U.S. manufacturing by 40%, or 5 million jobs. Reshoring will reduce the trade and budget deficits and make the U.S. safer, more self-reliant, and resilient.”