Reshoring group finds connections to 2023 job growth

A study from the Sarasota, Florida-based Reshoring Initiative of reshoring and foreign direct investment (FDI) in the U.S. in 2023 indicates some 287,000 manufacturing sector jobs were created via those activities.

The not-for-profit group, founded by former GE executive Harry Moser, strives to attract overseas manufacturing activity to the United States. According to the report, the 287,000 reshoring and FDI-related jobs created in the U.S. last year amounted to the second-highest year on record.

Jobs tied to the production of electric vehicle (EV) batteries, semiconductor chips and solar energy—items the Reshoring Initiative refers to as “essential goods supported by U.S. industrial policies"—made up 39 percent of the jobs created.

Those sectors consume varying amounts of recycled-content nonferrous and ferrous metals, with EV battery production having the potential to build up a sizable new recycling subsector involving the harvesting of lithium, nickel, cobalt and other metals contained in batteries.

Should the EV sector grow steadily, that is likely to boost domestic demand for copper and for aluminum sheet, some of which will be recycled-content metal. The solar energy sector can entail the use of steady amounts of steel in the construction of solar arrays or farms.

“Recent trends in reshoring and FDI are demonstrating significant strength and longevity," the Reshoring Initiative says. "Geopolitical risk and climate change have aligned corporate strategy and U.S. industrial policy, leading to a notable increase in U.S. manufacturing investments. These trends are largely driven by efforts to shorten supply chains and bolster domestic resilience.”

Funds available through the Inflation Reduction Act, CHIPS and Science Act and other federal legislation have assisted the manufacturing sector boost.

“[However, in Europe,] the ongoing conflict in Ukraine is expected to continue redirecting FDI from Europe to the U.S., primarily due to concerns over natural gas and electricity availability and pricing," the group says. "European-origin announced jobs [created in the U.S.] rose from 13 percent of the total in 2021 and 2022 to 34 percent in 2023, with a projected increase to 37 percent in 2024.”

The association also says situations in Israel, the Red Sea and Taiwan are leading corporate strategists to increasingly consider reshoring as a critical component of their long-term planning.

The Reshoring Initiative expresses concern about the federal government’s ability to continue subsidizing reshoring, however. Although the 287,000 jobs total in 2023 is significant, it represents a 16 percent decline from the 343,000 such jobs created in 2022.

Of the 2023 total of 287,000 jobs created, the group finds about 2 percent, slightly more than 7,900, were created in the metals production and fabrication sector. More than 9,500 jobs were created in the polymers sector and another 1,500 in the wood and paper products sector. Some 75 percent of jobs created were tied to making vehicles, appliances, machinery and electronics, or components for those sectors.

“The trends in reshoring and FDI indicate a robust movement toward strengthening U.S. manufacturing amid global uncertainties," the Reshoring Initiative says. "Strategic policies and geopolitical developments will continue to shape the landscape, driving investments that enhance supply chain resilience and economic security.”

The Reshoring Initiative’s full 35-page 2023 summary report can be downloaded here.