Reshoring and foreign direct investment (FDI) job announcements for 2022 reached a new record of 364,000, a 53% increase from the previous year, according to the Reshoring Initiative’s 2022 Data Report.
“We publish this data quarterly to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” said Harry Moser, founder and president of the Reshoring Initiative.
The report credits the Inflation Reduction Act and the Chips and Science Act for the drastic increase in U.S. manufacturing by both foreign and domestic companies.
Securing electrical equipment as the top industry, “U.S. investments in chips and EV batteries accounted for 53% of 2022 job announcements,” according to the report. “Electric vehicle batteries were the most active product to be reshored/FDI’d in 2022.”
The top driving factors for the trend were reported as government incentives, skilled workforce and supply chain interruption risk.
Together, the South and the Midwest account for 76% of jobs, with Ohio, Georgia, Tennessee and North Carolina appearing in the top five. However, New York boasts the highest number of job announcements for 2022 at 12%, a large jump from last year’s report where the state ranked 10.
From 2010 through 2022, Asia has accounted for 72% of reshoring; Asia has also surpassed Europe for FDI over the same time period, coming in at 48%.
“We expect 2023 and 2024 to remain strong, continuing at approximately 350,000 job announcements per year,” projects the report.
On its list of factors likely to slow reshoring and FDI, the No. 1 cause is the continuation of workforce shortages, echoing the concerns of many companies anxious to find skilled labor. Other forces are named as a high inflation rate, lack of automation investments and increased industrial capabilities in other countries.
Overall, the rate of job announcements last year was up almost 6,000% from 2010. “If the current trajectory continues, the U.S. will reduce the trade deficit, add jobs and become safer, more self-reliant and resilient.”
Although there is uncertainty, the report concludes that we can be cautiously optimistic about meeting the challenges that are to come.
“While the upward trend is sustaining momentum now, at some point companies will become more focused on fulfilling the giant commitments already made before announcing more. We may see a bump in smaller firm contract manufacturing jobs as they help fulfill the objectives of the recent large investments. It is also a hope that current supply chain improvements will foster ease and expand opportunities for more industries that previously couldn’t justify local production.”
