Record Reshoring Rates in 2022
Reshoring and foreign direct investment (FDI) in the third quarter marked their highest ever level, eclipsing the previous record set in the second quarter of 2022.
The Reshoring Initiative reported that third quarter reshoring and foreign direct investments (FDI) reached record levels, registering 15% higher than the second quarter — the previous high watermark — with a strong fourth quarter looking to result in a total of more than 350,000 jobs reshored for all of 2022. Reshoring says that 2022 projection of jobs would mark a nearly 40% improvement over 2021’s total of 255,000. Since 2010, the total jobs announced would top 1.6 million.
Reshoring noted that new investments in U.S. manufacturing by domestic and foreign companies briefly slowed their historic pace in the second quarter as inflation soared but following the passage of the Inflation Reduction Act and Chips and Science Act, investment once again resumed.
For the third year in a row, reshoring outpaced foreign direct investment (FDI), which the initiative believes reflects the peaking of globalization and U.S. incentives to bring manufacturing back. “It also indicates that U.S. headquartered companies are understanding the benefits to localized production that many foreign companies have understood for decades,” the Reshoring Initiative stated.
In the third quarter, Electrical Equipment driven by EV battery investment, remained the top reshoring industry. Computers and Electronics — including semiconductors and chips — moved to number two, displacing Transportation, which slid to fourth. Chemicals moved up to third place, driven by pharmaceuticals and materials contained in EV batteries.
Since electric vehicle batteries were tagged with the NAICS code of Electrical Equipment, that category has taken the number one ranking from Transportation Equipment, even though it still applies to the transportation industry. Electrical Equipment’s share of jobs announced soared from 3% in 2019 to 44% in 2022. So far in 2022, Reshoring reports 146 battery related cases that account for 105,000 jobs announced.
Computer and Electronic Products come in as the second largest reshoring industry in 2022, fueled by solar panels, robotics, drones and most recently, semiconductors. In 2022 there have been 61 reshoring cases of semiconductor/chips, with 28,800 jobs announced. Most of those came late in the third and fourth quarters, following the announcement of the Chips Act.
Hiccups in the global supply chain exacerbated by the pandemic have fueled the reshoring trend.
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