Manufacturing Jobs Are Returning to the U.S.

According to the Bureau of Labor Statistics, U.S. manufacturing jobs have been on a steady decline since 2000, with 5 million jobs going overseas since then. While 12.3 million Americans still work in the sector, it equates to only 8% of the workforce, compared to 24% of the workforce in 1960.

Yet Reshoring Initiative’s 2015 Reshoring Report shows that for the second year in a row, the number of jobs returning to the U.S. remains on par or higher than the number of jobs leaving.

Scott Paul, president of the Alliance for American Manufacturing, said in an article at CNN.com that while challenges remain, “manufacturing is certainly doing a lot better than it was in most of the 2000s and in the Great Recession.”

According to the report, the top reasons American manufacturers were bringing jobs back home were government incentives, localization, proximity to customers and an increasingly skilled workforce. Companies also cited leading problems offshore at lower quality, supply interruption, and high freight costs.

Deloitte reported in its 2016 Global Manufacturing Competitiveness Index that the sector’s gross exports grew 3.6% to $143 billion in 2015. The index also revealed the United States is now the second most competitive manufacturing economy after China and will surpass the Asian nation by the year 2020.

CEOs surveyed in the report said that advanced manufacturing technologies are the key to unlocking future competitiveness. Craig Giffi, Deloitte U.S. Automotive Sector leader, said the U.S.’ primary advantages are that it excels in “creating connections and synergy between people, technology, capital and organizations to form a cohesive ecosystem of innovation.”

Paul said that while there are prospects for a return of jobs, there are still labor challenges on the horizon as up to 3 million American manufacturing workers are expected to retire in the next decade. Whereas up until the mid-2000s, most manufacturing jobs only required a high school diploma, Paul said most now need advanced training skills. “The average American has no idea how robust the manufacturing sector has been and is going to be. We just need to get people the skills to take advantage of it,” said Paul.

Michelle Drew Rodriguez, manufacturing leader at Deloitte’s Center for Industry Insights echoed the sentiment, saying in a company statement that the aging workforce could be a barrier to reshoring. “It’s important that public and private sectors collaborate on the nation’s educational and technological future to remain a top manufacturing competitor,” said Rodriguez.