There are many things I wish were true. I wish Santa was for real and I would love to see Bigfoot in the wild. When it comes to public policy, my most fervent wish is the long-touted US manufacturing renaissance is for real. There’s lots of great anecdotal evidence for this claim, but it’s not a slam dunk. But, I really want it to be true as this is one of the best means we have to create better jobs at home and help long distressed communities seeking a new economic lifeline.
Sadly, two new reports raise more questions about the present and future of US manufacturing. A.T. Kearney’s Reshoring Index, released last month, finds that offshoring to overseas manufacturers is still outpacing reshoring back to the US. Meanwhile, the pace of reshoring—at least as tracked by AT Kearney– appears to be slowing. Similarly, a new Information Technology and Innovation Foundation report, The Myth of America’s Manufacturing Renaissance, is similarly pessimistic. It contends that many of the often cited trends that foster reshoring, such as lower energy costs at home, higher Chinese wages, and higher overseas transport costs, are not of sufficient scale to change the basic equation related to the location of manufacturing facilities. The authors conclude that the slight recent uptick in US manufacturing is a cyclical adjustment and not the harbinger of positive structural change.
These studies are not the last word, but they do suggest that we have more work to do. While the jury is still out on new directions for US manufacturing, that doesn’t mean we should simply throw up our hands in despair. Continued efforts to spur the revival are needed, and, in fact, are essential if we want this wish to come true.