Reshoring group says ‘tide has turned,’ more manufacturing jobs returning than leaving U.S.
by May 15, 2017 1:47 pm 1,297 views
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A Chicago-based group that advocates for the return of manufacturing jobs to the U.S. says “the tide has turned,” with more jobs “onshored” than leaving the country. But it will take many years of onshoring to return manufacturing jobs to U.S. and Arkansas peaks.
The Reshoring Initiative’s 2016 Data Report released Monday (May 15) indicates 77,000 jobs were brought back to the U.S., with just 50,000 leaving.
“In comparison to 2000-2003, when the United States lost, net, about 220,000 manufacturing jobs per year to offshoring, 2016 achieved a net gain of 27,000. The tide has turned. The numbers demonstrate that reshoring and [Foreign Direct Investment] FDI are important contributing factors to the country’s rebounding manufacturing sector,” noted the report.
Report data comes from the Reshoring Initiative Library of more than 4,000 published articles, reshoring case studies and documented cases. The report also includes info on the “nearshoring” trend of jobs returning from Canada and Mexico.
Harry Moser, founder and president of the Reshoring Initiative, notes more must be done to foster an environment that expedites onshoring.
“With 3 to 4 million manufacturing jobs still offshore, as measured by our $500 billion/year trade deficit, there is potential for much more growth. We call on the administration and Congress to enact policy changes to make the United States competitive again,” Moser said.
The report also suggests the election of Donald Trump to the White House had a positive impact on 2016 onshoring numbers.
“Reshoring and FDI together were up more than 10% in 2016, with much of the increase coming in November and December, presumably due to anticipation of greater U.S. competitiveness following the election.”
THE ARKANSAS PERSPECTIVE
Arkansas gained 3,663 jobs from onshoring between 2010-2016, with 45 companies moving operations from overseas to the state, according to the report. Arkansas ranked 20th on the Reshoring Initiative list for the number of jobs gained through reshoring.
While better than no gain, it’s not much compared to manufacturing jobs lost in recent years. As of March 2017, there were an estimated 157,300 manufacturing jobs in the state, better than the 154,200 in March 2016, but below the 159,500 in March 2010. The number of manufacturing jobs is 35% compared to peak manufacturing employment of 247,300 in February 1995, according to figures from the U.S. Bureau of Labor Statistics.
As of March 2017, Arkansas’ three largest metro areas contain 41.16% of the state’s manufacturing jobs. Northwest Arkansas had 27,500 manufacturing jobs (17.4% of the state total), central Arkansas had 20,000 jobs (11.06%), and the Fort Smith metro had 17,400 jobs (12.7%).
Also, Arkansas has lost more manufacturing jobs as a percentage than did the country. U.S. manufacturing jobs totaled 12.396 million in April, down 28.3% – compared to Arkansas’ 35% decline – from the peak of 19.553 million jobs in June 1979. U.S. manufacturing jobs have trended higher since hitting a low of of 11.453 million jobs in February 2010.
The 2017 Reshoring report may include the recent announcement that Shandong Ruyi Technology Group of China will invest $410 million in a former Sanyo plant in Forrest City, Ark. The garment factory is expected to employ 800 people when fully operational.
Following are the top 5 states in terms of reshored jobs between 2010-2016.
• South Carolina
51,468 jobs, 152 companies
• Tennessee
36,109 jobs, 112 companies
• Georgia
23,849 jobs, 91 companies
• Ohio
18,755 jobs, 139 companies
• North Carolina
18,009 jobs, 119 companies
OTHER RESHORING DATA, 2017 FORECAST
The Reshoring report also shows the largest number of jobs returned to the U.S. come from Asia, with China leading the list. Following are the top five countries from which jobs have been returned to the U.S. between 2010-2016: China, 79,540 jobs; Germany, 54,306 jobs; Japan, 35,292 jobs; Mexico, 19,399 jobs; and Canada, 15,787 jobs.
The report also suggested being close to a customer and/or market was the top reason companies’ reshored in 2016. Proximity was followed by tax incentives, and access to a skilled workforce. Other findings included:
• The Southeast and Texas remain the top regions for reshoring and FDI;
• Transportation equipment remained the strongest industry, accounting for nearly 40% of total jobs returned; and
• Plastics/rubber and furniture saw the largest increases in industry ranking.
Optimism for 2017 reshoring numbers is somewhat muted. The Reshoring Initiative predicts the 2017 numbers “will be flat to slightly up vs. 2016’s record level.”
“Other factors that will continue to influence jobs and the trade deficit include the strength of the U.S. dollar, relative to competitor countries. The strong USD and low oil prices hurt both trends, but probably hurt reshoring more than FDI as foreign companies act to increase their position in the strong U.S. market,” noted the report.
Improved access to a skilled workforce and “policy changes” could lower the “Total Cost of Ownership,” according to the Reshoring Initiative, which would help counter low energy prices which often works against reshoring.
Link here for the complete report from the Reshoring Initiative.