Expertise, not cost, is the new barrier to reshoring. Here’s where suppliers can make a difference

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U.S. importers are today deciding they can’t afford to manufacture offshore. A Bain & Company study echoed others and found that “81% of 166 CEOs and COOs surveyed have plans to bring supply chains closer to market, an increase of 18 percentage points since 2022.” 

The same Bain study also found that “only 2% of companies reported completing their reshoring plans.” Many have been at it for several years. Why the gap? 

The culprit may be a familiar one: a search for manufacturing expertise and talent that took many offshore in the first place. 

A study by the Economic Innovation Group released this past October tells us where the demand for onshore expertise is high — where manufacturing jobs are growing and in what industries. It’s also a roadmap to where we need more talent and expertise 

From 2019 through 2023, five industries accounted for the lion’s share of manufacturing employment growth in the U.S.:

  1. Food and beverage
  2. Transportation equipment, e.g. aerospace, automotive including new EV infrastructure
  3. Chemical
  4. Computer and electronics
  5. Electrical equipment.

 

States aligned with these industries enjoyed the most lift: in fact ⅔ of all new manufacturing jobs were created in five states:

 

 

Four sunbelt states – and Utah – are finding the right combination of homegrown assets, industry traction, and luck, to be in a leading wave of manufacturing growth.

Success for others means uncovering capable suppliers or developing new ones. Today both are big business. Digital sourcing platforms like PartnerSlate and Keychain are competing to connect brands and suppliers online in the food and beverage industry. Sustainment and CONNEX are vying to win a similar competition managing industrial supply chains. Hadrian and others are reimagining production and developing the next generation of American fabricators.

U.S. manufacturing seems poised to ‘turn the corner’ on workforce. (The topic for a different post.) If it does, and we refocus suppliers to growth industries to consolidate onshore production, the successful reshoring of American manufacturing will become the next story line.

Bart Taylor is founder of MFG Insider and executive director of the Greater Houston Manufacturing Association. Reach him at btaylor.media@gmail.com.