U.S. Reshored Jobs Rising — But What Will 2017 Bring?

U.S. Reshored Jobs Rising — But What Will 2017 Bring?

Jun 2, 2017

By Taras Berezowsky, Metal Miner Looks like the tide has finally turned. Extending that metaphor is easier now than it’s ever been for us writing on this topic: the reshoring of American manufacturing from abroad — and specifically, the net gains in jobs that we’ve been seeing in 2016 and early 2017 as compared with the trends in the early 2000s. (I envision the emigrating jobs huddled together for warmth on a seaworthy vessel, with Shanghai getting smaller in the distance as the Pacific waves toss the boat ever closer toward Long Beach… if only it were that poetic.) Back to reality. The Reshoring Initiative has just released its 2016 Data Report, and the numbers seem to tell a rosy story. According to the report press release, “in comparison to 2000-2003, when the United States lost, net, about 220,000 manufacturing jobs per year to offshoring, 2016 achieved a net gain of 27,000.” “The numbers demonstrate that reshoring and FDI are important contributing factors to the country’s rebounding manufacturing sector,” the release concluded. But of course, it’s not that easy. Major policy changes will have to be made or improved to continue the reshoring trend (which is still in its early stages), according to Harry Moser, founder of the Reshoring Initiative. In a way, the U.S. should aspire to host conditions like those in Germany, Moser told me, including a supportive government, VAT, low healthcare costs, and an appreciation of the benefit of local sourcing. “Germany has a huge trade surplus and manufacturing at about 20% of employment,” Moser said, “and [the U.S. has] a huge trade deficit and manufacturing at about 10%.” RELATED: We chatted with Moser in a video interview a few years ago when the latest results within the trend were gaining steam (below). The Good News for U.S. Metals Jobs According to the full report, in 2016, fabricated metals had a good showing with the fourth-most reshored jobs by industry category. Also, primary metals moved ahead of non-metallic minerals: Good to see that toys and hobbies industry jobs are coming back… but not nearly as quickly. The “Good/Bad/Who Knows” News for U.S. Metals Jobs One aspect of our new economy that’s...

Manufacturing Growth on Autopilot in May

Manufacturing Growth on Autopilot in May

Jun 1, 2017

By Bill Koenig, AdvancedManufacturing.org Manufacturing economic growth remained on autopilot in May,  the Institute for Supply Management (Tempe, AZ) said today. The institute’s PMI, which measures economic activity in manufacturing, was 54.9% last month, a tick up from April’s 54.8%, according to a monthly report. May was the ninth consecutive month of expansion in manufacturing. New orders, production and employment were all in positive territory last month, the group said. The PMI is “still a very strong number,” Timothy R. Fiore, the new chair of ISM’s Manufacturing Business Survey Committee, said on a conference call. Fifteen of 18 industries reported growth during the month, including machinery, primary metals, miscellaneous manufacturing, transportation equipment, fabricated metal products and petroleum and coal products. Two industries, apparel and textile mills, reported economic contraction. The ISM report is based on a survey of 350 purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction. The PMI has averaged 53.9% the past 12 months and 56.1% for the first five months of 2017. The index hasn’t been below 50% since August. ‘Turn of a Dime’ The group’s New Orders Index perked up to 59.5% in May from 57.5% the month before. Fourteen of 18 industries reported increases in orders, including primary metals, machinery, fabricated metal products, petroleum and coal products and transportation equipment. Only apparel reported a decline in orders. The institute’s Production Index cooled to 57.1% in May, down from 58.6% in April. Fourteen of 18 industries reported a boost in output, including primary metals, fabricated metal products, miscellaneous manufacturing, machinery and transportation equipment. ISM’s Employment Index advanced to 53.5% last month, up from 52% in April. Eleven of 18 industries reported job growth, including miscellaneous manufacturing, machinery and petroleum and coal products. Five industries reported job cuts, including fabricated metal products and transportation equipment. Fiore said the production and employment results may be tied together. Some manufacturers are have difficulty “finding qualified people on a turn of a dime,” he said. “Our ability to staff up is impacting the production...

Reshoring Exceeded Offshoring in 2016: Policy Changes Needed…

Reshoring Exceeded Offshoring in 2016: Policy Changes Needed…

May 15, 2017

Reshoring Initiative 2016 Data Report Reshoring Exceeded Offshoring in 2016: Policy Changes Needed to Maintain Momentum Kildeer, IL. May 15, 2017 — For the first time in decades, more manufacturing jobs are returning to the United States than are going offshore. The combined reshoring and foreign direct investment (FDI) trends grew by over 10 percent in 2016, adding 77,000 jobs (tying the 2014 record) and exceeding the rate of offshoring by about 27,000 jobs. The 2016 results bring the total number of manufacturing jobs brought back from offshore to more than 338,000 since the manufacturing employment low of February 2010. There are still huge opportunities and challenges to bringing back all the 3 to 4 million manufacturing jobs cumulatively lost to offshoring. The rate of job return announcements doubled in November 2016 and hit an all-time peak monthly record in January 2017. Clearly, government policy changes and expectations of those changes are key to accelerating the trend. Overview The Reshoring Initiative’s 2016 Reshoring Report contains data on U.S. reshoring and FDI by companies that have returned U.S. production or sourcing from offshore. The report includes cumulative data from 2010 through 2016, as well as highlights from the first quarter of 2017. In comparison to 2000-2003, when the United States lost, net, about 220,000 manufacturing jobs per year to offshoring, 2016 achieved a net gain of 27,000. The tide has turned. The numbers demonstrate that reshoring and FDI are important contributing factors to the country’s rebounding manufacturing sector. The overall trend was up from 2015 due to anticipation of potential policy changes that will make the United States more competitive, continued rising wages overseas, and increased use of total cost of ownership for sourcing decisions. “We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” said Harry Moser, founder and president of the Reshoring Initiative. “With 3 to 4 million manufacturing jobs still offshore, as measured by our $500 billion/year trade deficit, there is potential for much more growth. We call on the administration and Congress to enact policy changes to make the United States competitive again. Our Competitiveness Toolkit is...

Apple to create $1 billion U.S. advanced manufacturing fund

Apple to create $1 billion U.S. advanced manufacturing fund

May 4, 2017

By Stephen Nellis, Reuters Apple Inc (AAPL.O) plans to create a $1 billion fund to invest in U.S. companies that perform advanced manufacturing, Chief Executive Officer Tim Cook said on Wednesday, the iPhone maker’s latest effort to show how it is creating U.S. jobs. The Cupertino, California company will announce the fund’s first investment later in May, Cook said during an interview on CNBC. Cook also said Apple plans to fund programs that could include teaching people how to write computer code to create apps, and will release more details about the effort this summer. The announcements were the latest in a series of disclosures to highlight how Apple, the world’s largest company by market valuation, contributes to job creation in the United States. Apple came under fire from President Donald Trump during his campaign because it makes most of its products in China. In February during the company’s annual shareholder meeting, Cook said Apple spent $50 billion in 2016 with its U.S. suppliers, which include firms like 3M Co (MMM.N) and Corning Inc (GLW.N), the first time Apple has disclosed the metric. Cook reiterated that point during the CNBC interview, along with Apple’s claim that it has created 2 million jobs in the United States, 80,000 of which are directly at Apple and the rest coming from suppliers and software developers for the company’s app ecosystem. Apple is highlighting its U.S. presence at the same time lawmakers consider a major tax proposal by Trump that would let Apple, along with other large companies, bring back accumulated profits from overseas at potentially lower tax rates. Ninety-three percent of Apple’s $256.8 billion cash is held overseas. Cook, who met with lawmakers in Washington earlier this year to discuss tax policy and technology issues, said that Apple would have to borrow the cash for its U.S. manufacturing investment fund and said he was hopeful Trump administration would address the repatriation issue. Cook stopped short of saying Apple would bring some of its cash back into the United States if Trump’s tax proposal was enacted. “To invest in the United States, we have to borrow. This doesn’t make sense on a broad basis. So I think the...

U.S. manufacturing shows signs of stability as export orders…

U.S. manufacturing shows signs of stability as export orders…

May 2, 2017

“U.S. manufacturing shows signs of stability as export orders rise” By Lucia Mutikani, Reuters U.S. factory activity expanded at a more moderate pace in April due in part to a slowdown in new orders, but a rise in export orders to a near 1-1/2-year high and signs an inventory overhang drag was fading offered hope for the manufacturing sector. Another report on Monday showed construction spending rose to an 8-1/2-year high in March and the prior month’s outlays were revised higher, implying a small upward revision to the first quarter’s pedestrian growth rate. “Manufacturing is moving forward but we have the tortoise, not the hare in this race,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. The Institute for Supply Management (ISM) said its index of national factory activity slipped to 50.8 last month from a reading of 51.8 in March. Despite the fall, April marked the second straight month of expansion and was also the second highest reading in the last eight months. A reading above 50 indicates expansion in the manufacturing sector, which accounts for 12 percent of the U.S. economy. Economists had forecast the ISM manufacturing index dipping to 51.4 last month. Manufacturing has been hurt by weak export growth stemming from a strong dollar and soft global demand. The sector has also been hammered by relentless aggressive spending cuts in the energy sector in the aftermath of last year’s plunge in oil prices. Efforts by businesses to reduce an inventory overhang have resulted in fewer factory orders, leading to further erosion in the manufacturing sector. U.S. stocks were trading higher on Monday, while prices for U.S. Treasuries fell. The dollar .DXY weakened against a basket of currencies. Q2 GDP REBOUND EXPECTED Manufacturing last month was held back by a drop in the gauge of orders received by factories, which fell 2.5 points to 55.8 percent. Factory production also fell last month. A 10th consecutive monthly decline in inventories restrained manufacturing activity in April, but represented good news for future factory output. ISM said customer inventories hit a nine-month low last month and were now regarded as being “too low.” A gauge of export orders rose to...