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Industry Talk

Reshoring to hit a new high in the USA in 2022

Increased focus on carbon emissions by investors boosting the need for closer-to-home supply chains.

5th September 2022

Innovation in Textiles
 |  Sarasota, FL, USA


The USA is on course to create a record 350,000 jobs through reshoring and foreign direct investment (FDI) in 2022 –more than 50 times the 6,000 jobs reshored  in 2010 – according to the Saraosta, Florida-based Reshoring Initiative.

This follows a record 260,000 such jobs created in 2021, based on announcements of head-count increases for positions that were previously held in other countries, new positions in industries that had little to no US presence and positions created from direct investment by companies based in other countries.

Supply chain gaps and the need for greater self-sufficiency continue to be major factors in driving reshoring. The possibility of a Taiwan-China conflict and the threat of China decoupling are further focusing concerns, the Reshoring Initiative says, as destabilising geo-political and climate forces have brought to light the USA’s vulnerabilities and the need to address them.

“Subsequently, great opportunities have arisen for a meaningful rebound of US manufacturing,” the organisation states. “If the current trajectory continues, it will reduce the trade and budget deficits, add jobs, and make the USA safer, more self-reliant and resilient.”

The continuing upward trend is due almost exclusively to companies filling supply chain gaps for essential products, including electric batteries, semiconductors, pharmaceuticals, rare earths and renewable energy, in addition to the PPE which significantly highlighted US supply chain problems during the Covid-19 pandemic.

Shifting geopolitical forces are keeping supply chain risks in focus, resulting in increases in public awareness, government interventions and actions by individual companies.

So far, the top three states by jobs announced are Kentucky, North Carolina and Georgia.

The Wall Street Journal notes that the US government is also luring companies back. The Chips and Science Act and the Inflation Reduction Act, both passed in August, provide tax breaks and other incentives for building and investing in manufacturing centres for goods such as semiconductors, electric vehicles and pharmaceuticals.

An increased focus on carbon emissions by investors has also boosted the need for closer-to-home supply chains. Carbon pricing mechanisms and taxes recently implemented in the European Union and elsewhere will further reduce the appeal of extensive cross-border supply chains, according to Barclays economists.

Barclays found that large S&P 500 companies are recruiting more in their home countries and slowing cross-border merger and acquisition activity.

“Globalisation is in retreat,” the firm’s UK-based economists Christian Keller and Akash Utsav wrote.

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