Record number of manufacturing jobs returning to America
Published: May 1, 2015
Sixty thousand manufacturing jobs were added in the U.S. in 2014, versus 12,000 in 2003, either through so-called reshoring, in which American companies bring jobs back to the U.S., or foreign direct investment, in which foreign companies move production to the U.S., according to a study from the
Reshoring Initiative. In contrast, as many as 50,000 jobs were “offshored” last year, a decline from about 150,000 in 2003.
Why is this significant? 2014’s net increase of at least 10,000 jobs was the first net gain in at least 20 years, Harry Moser, the Reshoring Initiative’s founder and president, told MarketWatch. “The trend in manufacturing in the U.S. is to source domestically,” Moser said.
“With 3 [million] to 4 million manufacturing jobs still offshore, we see huge potential for even more growth.”
Record number of manufacturing jobs returning to America
The Competitive Edge: Manufacturing's Multiplier Effect -- It's Bigger Than You Think
Nothing demonstrates this more than manufacturing's multiplier. A sectoral multiplier effect tells us which companies and industries give the economy the biggest bang for the buck, literally. Every dollar of output in a sector generates a certain level of economic activity across society -- sales and purchasing transactions that lead to a direct and indirect need for employment and resources within other facets of society.
Because manufacturing has so many substantial links with so many other sectors throughout the economy, its output stimulates more economic activity across society than any other sector. That's a major reason manufacturers play such a critical role in growth. As factory output grows, it requires more inputs from mining and utilities and suppliers and creates job and investment opportunities in all the other sectors that use its products, such as transportation, construction, and retail. It also spurs growth in services such as finance and transportation.
So what's the actual impact? Earlier projections based on Bureau of Economic Analysis (BEA) annual input-output tables have calculated that
a dollar's worth of final demand for manufacturers generates $1.48 in other services and production. This is higher than any other sector.
The Competitive Edge: Manufacturing's Multiplier Effect -- It's Bigger Than You Think