Rehsoring Adds More Jobs but Not Net Growth

Reshoring Adds More Jobs but Not Net Growth

New study shows manufacturing sector is expected to level off at an employment level of roughly 11 million jobs between now and 2020, after losing 6 million jobs between 2000 and 2010.

While some industries add jobs, others shed them resulting in no change to the total number of manufacturing jobs. However there has been a halt in the decades-long trend of losing more jobs than added, according to a new report, Stabilization of the U.S. Manufacturing Sector and Its Impact on Industrial Real Estate by the  NAIOP Research Foundation, released on June 5.

The study concludes that the reshoring trend of manufacturing industries to the United States yields stabilization of jobs, but not net growth.

The manufacturing sector is expected to level off at an employment level of roughly 11 million jobs between now and 2020, after losing 6 million jobs between 2000 and 2010.

“Employment stabilization across the manufacturing sector bodes well for the overall economy and creates opportunity for real estate,” said Thomas J. Bisacquino, NAIOP CEO. “Rising wages in countries like China, increasing global transportation costs and political instability abroad are all factors affecting the decision to remain or return to the United States.”

While industrial-related jobs are projected to stabilize, service-based jobs are expected to grow on a net basis. The result is that 20 million net new jobs are projected to be created in the United States between 2013 and 2020, compared to a slight loss of about 5 million jobs between 2000 and 2010.  

Growing/ Declining Industries and Geographic Implications

Between 2010 and 2020, Industries generating low labor products, such as chemicals and technology, are expected to expand, and industries generating more labor intensive products, such as apparel, are likely to contract.

 

Top Five Expanding Industries By Space Usage

Industry

Increase in Square Footage (in millions), 2013-2020

U.S. Region

Fabricated metal product manufacturing

86.5

Great Lakes and Southeast

Plastics and rubber products manufacturing  

61.5

Great Lakes and Southeast

Wood product manufacturing

45.2

Southeast and Far West

Nonmetallic mineral product manufacturing  

32.8

Southeast and Great Lakes

Furniture and related product manufacturing

25.8

Southeast and Great Lakes

 

A geographic shift is expected to metropolitan areas, as companies select more strategic locations that decrease transportation costs and locate closer to consumers and skilled labor. “As a result, the reshoring trend will not be felt evenly across the United States,” said Bisacquino. “The opportunity for real estate is for regions with expanding industries to be prepared with skilled workforces to fulfill the job demand and facilitate the development of the necessary infrastructure and buildings.” 

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