"Relatively few plants are shut down in the U.S. by an owner who opens up an identical facility abroad and supplies the U.S. market with imports from the foreign affiliate," said MAPI Chief Economist Daniel J. Meckstroth
Not a Manufacturing Revival
Recently, some runaway plants returned home and there are some positive economic incentives to encourage more domestic sourcing. Among them, the U.S. dollar has fallen 23% in value since 2002; unit labor costs in U.S. manufacturing have been relatively flat over the last 10 years and well below the rate of consumer inflation; and natural gas prices in the United States are at least two to three times lower than in Europe and Japan.
“Although economic forces and business requirements seem to be shifting in favor of domestic sourcing, there is little evidence that a manufacturing revival has occurred,” Meckstroth noted.
Manufacturing’s share of GDP fell from 12.1% in 2007 to 11.5% in 2011, and the import share of U.S. manufacturing consumption rose from 38% in 2006 to nearly 40% in 2011.
Meckstroth said more factors need to be in play for a real industry upswing, especially those relating to public policy areas such as corporate taxes, trade, technology, talent, and regulations.
“The necessary positive economic and strategic forces are not reinforced by supportive public policy,” he said.
