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July 8, 2024

PRESS RELEASE

Reshoring Initiative 2023 Annual Report:

Geopolitical Risk and Industrial Policy Drive Reshoring and FDI Announcements

Sarasota, FL, July 8th, 2024 — Reshoring + foreign direct investment (FDI) job announcements in 2023 continued to climb, adding 287,000 jobs, the second-highest year on record. EV batteries, semiconductor chips, and solar - all essential goods supported by U.S. industrial policies, account for 39% of the job announcements.

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Executive Summary:

Recent trends in reshoring and foreign direct investment (FDI) are demonstrating significant strength and longevity. 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.

Key Highlights:

1. Growth in Essential Industries:

  • Substantial growth has been observed in “essential” industries, particularly those supported by the Inflation Reduction Act (IRA), CHIPS and Science Act and other government subsidies. Top products include electric vehicle (EV) batteries, semiconductor chips, and solar energy. Collectively they accounted for approximately 39% of the announced jobs in 2023.

    • 2. Future of Subsidies and Policies:

  • With government subsidies beginning to wane, new reshoring and FDI announcements are showing signs of slowing. The Congressional Budget Office just increased its budget deficit estimate for 2024 by 25%, projecting an annual deficit increase to 5.5% of GDP through 2034. Future progress will have to depend heavily on policies that enhance long-term U.S. manufacturing cost-competitiveness rather than relying solely on subsidies.

    • 3. Impact of Geopolitical Risks:

  • Geopolitical risk is the #1 driving force in reshoring and FDI trends:
    • 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. European-origin announced jobs rose from 13% of the total in 2021 and 2022 to 34% in 2023, with a projected increase to 37% in 2024.

    • Israel: The recent Hamas attack on October 7 is anticipated to influence FDI trends moving forward, although it was too late to impact 2023 data. Nearly all cases from Israel are FDI – its companies have long understood the value of having assets in the U.S.

    • Taiwan: Rising tension between the U.S. and China over Taiwan is a key factor in industrial policy, leading corporate strategists to increasingly consider reshoring as a critical component of their long-term planning. 20% of the cases from 2010 to the present were reshoring, 72% FDI and 8% were nearshoring. Jobs/year peaked in 2022 at 12,500, primarily due to Taiwan Semiconductor, and dropped to 650 in 2023.

    4. Skilled Workforce:

  • The success or failure of recruiting and training millions of workers will determine the outcome of the current reindustrialization momentum, in either direction. Trends are moderately positive, e.g. manufacturing apprenticeships up 83% in the last 10 years. About 49% of cases in 2023 mentioned skilled workforce availability as a reason they reshored, essentially tied for #2 with Proximity to Customers.

    • Conclusion:

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

    Read the full report: Reshoring Initiative 2023 Annual Report: Reshoring and FDI Job Announcements Reach 287K - Second Highest Year on Record

    About the Report

    The Reshoring Initiative’s 2023 Report contains data on U.S. reshoring and FDI by companies that have shifted production or sourcing from offshore to the United States.

    “We publish this data to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” said Harry Moser, founder and president of the Reshoring Initiative. “With 5 million manufacturing jobs still offshore, as measured by our $1.2 trillion/year goods trade deficit, there is potential for much more growth. We also call on the administration and Congress to enact policy changes to make the United States competitive again.”

    About the Reshoring Initiative

    A 55-year manufacturing industry veteran and retired President of GF Machining Solutions, Harry Moser founded the Reshoring Initiative to move lost jobs back to the U.S. He was named to the Industry Week and Association for Manufacturing Excellence (AME) Halls of Fame for his efforts with the Reshoring Initiative. Additional information on the Reshoring Initiative and its many sponsoring associations and companies is available at www.reshorenow.org.

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    MEDIA CONTACTS:

    Harry Moser

    President

    Reshoring Initiative

    847.867.1144

    Harry.Moser@reshorenow.org or

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    Chuck Bates, Public Relations Director

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