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  April 12th, 2016 | Written by

Reshoring Initiative 2015 Data Report: Reshoring Balanced Offshoring in 2015

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  • Reasons for reshoring in 2015: government incentives, localization, proximity to customers, and a skilled workforce.
  • Leading manufacturing problems offshore included lower quality, supply interruption, and high freight costs.
  • Rising offshore wages and total costs have been major drivers in reshoring decisions.

One of the hottest topics in the primary election campaign of 2016 has been the offshoring of jobs and whether to support the Trans-Pacific Partnership (TPP) trade agreement. The Reshoring Initiative’s 2015 Reshoring Report shows that rapid job loss has been stemmed, but there are still huge challenges to bringing back the three- to four-million manufacturing jobs previously lost to offshoring.

The combined reshoring and FDI trends remained strong in 2015, adding 67,000 jobs and bringing the total number of manufacturing jobs brought from offshore to more than 249,000 since the manufacturing employment low of February 2010.

The overall trend was off six percent from 2014 due to the strong dollar, low oil prices and shipping rates, and competitor countries having weaker economies than the U.S. Recently, FDI has been stronger than reshoring. Both trends are based on the logic of producing in the local market.

Despite the small downturn, for the second year in a row the number of jobs returning to the U.S. remains on par or slightly higher than the number of jobs leaving. By comparison, in 2000-2007, the United States lost about 220,000 manufacturing jobs per year net to offshoring. The steady decrease in the number of jobs lost per year, to zero or a net gain, continues to demonstrate and build confidence that reshoring and FDI are important contributing factors to the country’s rebounding manufacturing sector.

“We publish this data annually to show companies that sourcing domestically is an increasing trend in the United States,” said Harry Moser, founder and president of the Reshoring Initiative. “With three- to four-million manufacturing jobs still offshore, we see potential for even more growth, and we hope this data will motivate more companies to reevaluate their sourcing and siting decisions.”

Of particular interest are the reasons companies gave for reshoring and FDI. Government incentives, ecosystems/localization, proximity to customers, and a skilled workforce topped the list in 2015. At the same time, companies cited lower quality, supply interruption (this category had the largest increase from last year), high freight costs and delivery as leading problems offshore. Cumulatively, rising wages and total cost have been major drivers in reshoring decisions.

Regionally, the trend remained strongest in the Southeast and Texas, but in 2015 the West displaced the Midwest to hold second place for most jobs shifted from offshore.

Many studies predict an increase in U.S. competitiveness through the year 2020, despite headwinds of the high dollar. U.S. companies can use reshoring trend data to determine where to obtain a greater competitive edge within the global economy.