Reshoring Happening, but Job Growth is Slow

Reshoring is the process of bringing work that was originally offshored, or sent overseas, back to the United States. Manufacturing centers in the country are experiencing some benefits from the recent reshoring moves by many major companies over the last few months, but job growth remains largely unchanged over the past few years. Understanding exactly how this phenomenon affects manufacturing workers in the private sector and what it could mean for the future can help manufacturers stay one step ahead of the market at large.

Many major manufacturing companies looked overseas for less expensive labor and raw materials when the economy in the United States was booming. They began the process of offshoring, or moving plants and jobs overseas, to cut down on expenses and produce competitively priced goods. The move to overseas markets, however, increased the cost of living in centers where new manufacturing plants arose. This increased labor costs, and the increased costs of fuel and other import expenses prompted the reshoring of many manufacturing facilities, allowing them to build products closer to the consumer base and avoid import fees or shipping costs.

Manufacturing growth remains sluggish when it comes to jobs, however. A recent report on the state of manufacturing in America shows that while the sector overall has experienced an increase in activity, job growth has remained fairly flat. Only 20,000 new jobs were added for the workforce over the last four months. This indicates that while companies may be reshoring facilities and manufacturing plants, they have not yet had a serious need for new employees. Manufacturing growth, despite a strong correlation, does not always translate immediately into job growth.

The same report hints at the fact that we may soon see a major increase in job growth. As the American economy continues its staggered recovery from recession, consumer indices are likely to continue to show increased spending and overall confidence. Future jobs reports may provide the information that many employers are hoping to see. An increase in manufacturing opportunity due to reshoring is likely to have a pronounced effect on job growth in the longer term.

Reshoring is definitely beneficial for areas where manufacturing centers relocate. Many companies that are bringing facilities back to the United States have not begun extensive hiring pushes, but there is hope that an influx of available positions may occur in the near future. The manufacturing sector shows signs of growth and recovery, and these may result in job growth as well as overall industry strength. The close tie of growth in the manufacturing sector to consumer confidence may well dictate the future of how reshoring affects manufacturing jobs across the nation.

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