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Reshoring

The U.S. manufacturing sector has seen a revival in recent times, with an increase in outputs and an increase in jobs. The Great Recession saw the manufacturing sector take a massive hit, and while the current condition of the manufacturing sector is still not back to the levels of the start of the millennium, it is in the middle of a comeback, and has great promise for the future.

Reshoring and Asian Expansion

Part of the manufacturing comeback is an increase in jobs on the shores of the United States. This is coming mainly in two forms – reshoring, and Asian expansion. Reshoring refers to American companies bringing jobs back to the country. This has been encouraged by the increase in wages in the countries traditionally used for offshoring and the rationalization of the costs of logistical support.

The expansion of Asian companies, in particular Chinese companies, has also helped. In 2012, Chinese foreign investment in America eclipsed American foreign investment in China for the first time. Mergers and acquisitions are part of this, with Chinese companies taking over American companies. However, in some cases, it is a matter of the Chinese companies moving jobs to American shores. Companies such as Shandong Tranlin Paper, the Keer Group, SANY and Lenovo either have already developed new manufacturing plants on U.S. soil or are in the process of building them.

Growth of the Job Force

Another factor in the comeback of U.S. manufacturing is the changing dynamics of manufacturing jobs and the required skill set of the work force. Aside from the cost factor, an additional reason behind offshoring was the lack of qualified manufacturing workers in the United States given the rapid changes in technology and consumer expectations. During the late 20th century, manufacturing was unjustly labeled as a “dirty” job. An entire generation of potential manufacturing workers pursued other directions.

The comeback has been partially fueled by a push to improve STEM education and shrink the skills gap, as we have talked about in previous blogs. Another reason for the change is that the work force is beginning to see that manufacturing is not an inherently “dirty” sector. Finally, many are finding out that there is plenty of room in the manufacturing sector for innovation and technological advances, that it is always evolving and rarely stagnant. This has caused an increase in interest at all education levels.

As the U.S. manufacturing sector continues its comeback, we at Production Materials look forward to help keep it moving. Our customers are continually looking for ways to lower costs and offer innovative products. As American manufacturers continue to improve their ability to quickly adapt to these requirements through investments in technology and upgraded labor skills more of the products we require can be procured right here in the good old USA.

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Posted on: May 11th, 2015 | Posted in: manufacturing

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