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The Reshoring Initiative’s index, which tracks jobs and foreign direct investment (FDI), reported a combined total of 160,649 new announcements for 2020. Reshoring exceeded FDI for the first time since 2013 — new job notices reached a record of 109,000.

Source: the Reshoring Initiative
A.T. Kearney said the U.S. has “not reclaimed manufacturing jobs in any material way.” Kearney looks at the import of manufactured goods from 14 traditional offshore trading partners and the U.S. domestic gross output of manufactured goods. The manufacturing import ratio (MIR) divides the import and output numbers. Kearney’s reshoring index is the year-over-year change in the MIR, which in 2020 was -87 percent.
Covid-19 wreaked havoc on both measurements. The 2020 jump in reshoring was driven by import shortages observed during the pandemic, said the Reshoring Initiative. Kearney’s index – which was a roller coaster ride during the year – ultimately closed the year in negative territory.

Source: A.T. Kearney
But many manufacturers viewed the pandemic as an agent of change. “2020 certainly tested the resilience of global supply chains,” said Lynn Torrel, chief procurement and supply chain officer, Flex. “Rather than dwelling on past hardships, businesses have an opportunity to view recent challenges as an impetus for supply chain innovation.”
“One bright silver lining to the pandemic is the broad public and corporate realization and acknowledgement of the need to shorten supply chains and produce goods at home,” said the Reshoring Initiative.
U.S. manufacturing executives intend to reshore at least some manufacturing operations over the next three years, Kearney found. Some executives voiced a strong intent to reduce dependence on manufactured imports from any one country, particularly China. However, Covid disrupted labor productivity and U.S. managers are having a hard time finding workers post-pandemic.
In a separate study, Kearney found:
- 41 percent of respondents said their company has reshored at least a portion of their manufacturing operations to the U.S. over the past three years.
- 22 percent said their company plans to reshore some manufacturing within the next three years
- 49 percent agreed or strongly agreed that the benefits of onshore production outweigh the higher labor costs.
- 52 percent reported that when Covid disrupted global supply chains, their company increased domestic manufacturing/sourcing of products
- 48 percent agreed or strongly agreed that current domestic policies and international trade policies sufficiently encourage reshoring and investment in domestic facilities
- 47 percent said their company will strive to diversify its supply chain over the next three years to reduce dependence on a single country source or manufacturing location
- 41 percent said they will specifically strive to reduce dependence on China for manufacturing
The pros and cons
The Biden administration’s plans to study the U.S. supply chain and congressional efforts to boost U.S. chip production have spurred more interest in reshoring, especially for tech. Reshoring and FDI are adding more high-tech jobs than low-tech, according to the Reshoring Initiative. This trend is important since the U.S. has a trade deficit in high-tech products. High-tech tech companies average more employees/company than do lower tech companies.
The Initiative cited other factors that favor reshoring:
- Government actions to reduce national dependence on imports of key products
- Continued growth in efforts by MEPs (Manufacturing Extension Partnerships), EDOs (economic development organizations) and states to enable reshoring
- Continued decline in the USD – The dollar is down 10 percent from a brief March 2020 high and is approaching a 2018 low.
- Corporate responsibility expansion
- Shifting markets – world growth recovery will make other markets more attractive for offshore suppliers leaving domestic suppliers with less competition to supply the U.S.
- Continued increases in usage of TCO (Total Cost of Ownership) instead of price
- Continued improvement in skilled workforce programs
- Improving environmental consciousness – domestic supply chains are more transparent than offshore
- Possible aggressive “decoupling” by China
The organization cited some negative trends that include concern about new tax rates and regulations; Covid-related unemployment payments and remote schooling making work unattractive for some; and disrupted supply chains causing lack of availability of components.
Once the roiling effect of Covid-19 recedes, the reshoring index seems likely to again shift positive, as global economies recover and overseas demand for U.S. manufactured goods gradually rebounds, concluded Kearney. “Viewed in this light, the -87 reshoring index for 2020 looks more like an aberration caused by the global pandemic.”
Results in 2021 will depend largely on economic recovery from the Covid crisis, according to the Reshoring Initiative. “There are two forces that will conflict. On the negative side, the virus’ continued impact on the economy and business uncertainty. On the positive front, the virus’ lesson about the country’s lack of self-sufficiency will spur growth in local sourcing.”