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.
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Top Five Expanding Industries By Space Usage |
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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.”
