The Truth About Reshoring

“The Made in America movement is happening, and the Chinese economy is suffering”. “China’s manufacturing sector is alive and well”. “Reshoring is a hoax, and U.S. industry is struggling”. If you keep up with manufacturing news, you’ve probably seen different variations of these statements popping up in headlines in your news feed over the past few months.

This may have left you scratching your head with a number of questions, but one thing is clear. U.S. manufacturers may or may not be bringing back production to the United States and this may or may not be affecting different economies around the world. There, now that’s settled…

We’re being told that reshoring is making a huge difference in U.S. manufacturing, but in fact the information is conflicting. One source confirms the resurgence of manufacturing in the United States while the other confirms that the opposite is happening.

There are a number of factors that have made claims of a manufacturing renaissance seem plausible. Increased wages, more regulations, and stricter energy guidelines overseas have made offshoring a less enticing option. The cost advantages of offshoring are no longer as great as they once were. Combine that with the investments that the administration have made in manufacturing, and it seems like there would be a revitalization of manufacturing here in the U.S.

However much of the news saying that there’s a manufacturing renaissance in the U.S. has been based on what companies and manufacturers have said rather than what companies and manufacturers have done.

Take for example Walmart’s made in the USA scandal. Over the past couple of years, Walmart has been spending millions of dollars advertising that they are bringing manufacturing back to the U.S., and have increased the number of “U.S. made” goods on their shelves. However a federal Trade Commission investigation started after it was discovered that Walmart had labeled more than 100 items  with a “Made in the U.S.A.” logo, when those items were not in fact actually made in the United States.

That’s not to say that reshoring is a hoax, or that the manufacturing renaissance is a lie.

Right now there are so many conflicting reports that it’s hard to tell what’s really happening with the state of U.S. manufacturing. It’s easy for people to get carried away with predictions for the sake of a story. Just keep that in mind when reading news about manufacturing.