Us American Flag In Factory Setting Yellow Bg Reshoring Id 163250898 Tloventures Dreamstime 6149436da51b3

Reshoring on Track to Hit Record Highs in 2021

Sept. 21, 2021
Ohio, Arizona, and Tennessee have been top beneficiaries of recent reshoring.

If present trends hold, we may be in for a boom era of U.S. manufacturing reshoring.

The latest report from the Reshoring Initiative projected the U.S. is on track to add a total of 224,213 jobs from abroad in 2021, 38% more than the 161,000 added in 2020 due to reshoring and foreign direct investment (FDI).

The Initiative, which publishes semiannual reports on manufacturing jobs returning to the United States from other countries, also predicted that 2021 would see more jobs created due to reshoring than federal direct investment for a second year in a row.

According to the data, reshoring is on track to make up 62% of such jobs this year—a smaller percentage than last year, when 7 out of 10 such jobs were reshored, but a sizeable increase in absolute terms.

Essential products investment is helping drive this year’s gains, the Initiative said, including increased funding for domestic semiconductors, electric vehicle batteries and pharmaceuticals. Those products—in addition to PPE and rare earth metals—represent collectively about 28% of returning jobs.

As was the case in 2020 and 2019, the transportation equipment industry is expected to rehome more jobs than any other sector, but the chemicals and electronics sectors are catching up.

Transportation equipment is forecast to add 54,961 reshored or foreign-investment-created jobs this year, or 25% of all such jobs. That notably includes electric vehicle battery production. Chemical companies are expected to add 37,233 jobs or 17% of new jobs from abroad. By comparison, 2020 saw transportation equipment account for 28% of newly returning jobs while chemicals made up only 16%.

The largest-growing sector for restored or foreign-invested jobs this year is the computer and electronics industry. Driven to return to or invest in the United States due to a sharply renewed interest in domestic semiconductor supply, computer and electronics companies are expected to account for 17% of the share in newly-U.S. jobs, up from 9% in 2020.

The Initiative gave credit to the Biden Administration for “applying needed tourniquets,” like investing in semiconductor and battery production, but criticized it for not addressing the costs of producing goods in the U.S. It costs 15% less to produce goods in Germany, the report noted, and 40% less in China.

It also cautioned that higher investments in computer chips might do little in the long term, since other countries are also investing in domestic semiconductor production: “When the industry has a global surplus, the high-cost U.S. chips will not be competitive in the low-cost markets,” the Initiative said.

Reshoring and foreign direct investment have already created more than 90,000 jobs in the United States this year, with Ohio, Arizona, and Tennessee each gaining more than 10,000 jobs apiece. Texas, which ranked at number two for new FDI/reshoring jobs created in 2020, slipped to number thirteen with 3,488 new jobs in the first half of the year.

As for where the jobs are coming from, the Initiative reports that the country sending the most jobs to the United States is South Korea. The southeast Asian country sent 10,904 jobs to the United States from reshoring or direct investment, more than Germany (which sent 7,286 jobs) or Canada (5,900).

While China is listed in the report as sending a little more than 2,000 jobs to the United States, the Reshoring Initiative said it might be undercounting those results because of how it counts “automatic reshoring.” Most jobs sent from China are cases where domestic production comes to replace imports of mostly imported goods.

While many of these jobs do, in fact, come from China, the Initiative said, factories don’t always report where the imports originally came from, making the origin country of the import-replacing jobs harder to track.

About the Author

Ryan Secard | Associate Editor


Focus: Workforce and labor issues; machining and foundry management

Associate Editor Ryan Secard covers topics relevant to the manufacturing workforce, including recruitment, safety, labor organizations, and the skills gap. Ryan has written IndustryWeek's Salary Survey annually since 2021 and has coordinated its Talent Advisory Board since September 2023.

Ryan got started at IndustryWeek in August 2019 as an editorial intern and was hired as a news editor in 2020 before his 2023 promotion to associate editor, talent. He has a Bachelor of Arts in English from the College of Wooster.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!