The Covid-19 pandemic, supported by U.S. government initiatives, has spurred a national push to strengthen the domestic supply chain, according to the Reshoring Initiative. If the second half of the year progresses at the same rate as 1H, reshoring and foreign direct investment (FDI) job announcements for 2021 are projected to be over 220,000 – 38 percent above 2020 and the highest yearly number recorded to date.
The projection of jobs for the essential products that the Biden administration has focused on – chips, EV batteries, PPE, pharmaceuticals, and rare earths - represent 28 percent of those jobs, or 62,500. Without these products the U.S. would be at 157,500, the initiative said.
While some of the essential products would have come back without the Biden push (in fact, essential products represented 33 percent of 2020 jobs with less government push), it is reasonable to state that the administration’s initiatives have driven some but not all of the increase from 2020 (160,000) to 2021 projected (220,000), according to the Reshoring Initiative.
The computer and electronics industry has seen the largest jump in percent of jobs due to semiconductor/chip investment. The number of reshoring and FDI jobs added in transportation equipment is down from pre-pandemic levels. The jobs that are coming back in are mostly in electric vehicle battery production. (The initiative categorizes batteries as EV because the U.S. has been so far behind on batteries. It does not include added domestic production of electric vehicles as reshoring, even though the U.S. lags Europe and China in EV production.) According to the data, currently the most jobs are coming from Korea, predominantly by way of FDI in EV batteries.
Both PPE and pharmaceuticals are down from 2020.
For the second year in a row, reshoring job announcements outpaced FDI – 62 percent vs. 38 percent (historically very high but lower than last year’s rate of 70 percent reshoring, 30 percent FDI.)
Other highlights from the report include:
- Comparing 2020 to 2021, high and medium-high tech jobs are seeing a greater portion of job announcements than low and medium-low.
- So far this year Ohio, Arizona and Tennessee have seen the most job announcements. Texas has dropped from 2nd in 2020 to 13th in 2021. South Carolina is 11th.
- According to the data, currently the most jobs are coming from Korea, predominantly by way of FDI in EV batteries.
The rate of jobs coming from China is largely underreported, according to the initiative. This is because much of the new essential product production is what it defines as “automatic reshoring” -- where domestic production is replacing imports in cases where a high percentage of the product has traditionally been imported. In many of these cases, the work is displaced from China, but factory announcements do not report the country whose imports are replaced.