Millions of Manufacturing Jobs Could Return to United States

Qmed Staff

August 27, 2013

2 Min Read
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By 2020, the United States manufacturing sector could add up to five million jobs, according to the Boston Consulting Group. The report, released on Tuesday, states that outsourcing will change to "resourcing." This represents a migration of manufacturing jobs from China and other BRICs back to the United States.

In total, the report notes that the total number of manufacturing jobs added by 2020 could range from 2.5 million to 5 million. If the 5 million jobs figure holds true, this could represent a 2% to 3% drop in unemployment in the United States.

A recent article in Design News comes to a similar conclusion, arguing that new technologies such as "three-dimensional vision, offline programming, and force-sensing technology being used in robotic automation systems" are reducing the need to offshore production; they are in fact, leading to an increase in domestic jobs.
Over the past two decades, the manufacturing sector in the United States has lost approximately 5 million jobs. As of now, approximately 12 million people in the United States are employed in manufacturing.

While the 2007-2009 recession affected many different parts of the United States economy, one result was stagnant labor costs. On top of this, the United States experienced a significant increase in energy production. These factors have both contributed towards an increase in domestic manufacturing. With low energy costs and low labor costs, the United States may experience a resurgence in manufacturing.

Another report by the Manufacturing Alliance for Productivity and Innovation stated that the trade gap of $227 billion during the first half of this year is equal to the trade gap during the first half of 2012. This could indicate that the trade gap is leveling off.

Still, the reshoring phenomenon may be overhyped--at least in the medical device industry, where the hurdles to commercialize medical devices have become especially challenging in recent years.

Covidien, for instance, has been steadily increasing its level of offshoring over the years. In 2008, 10% of its manufacturing was performed in low-cost nation. It was 14% last year.

"Growing cost concerns among [medical device] OEMs is driving more production to Central America and Asia," explained Phillips-Medisize CEO Matt Jennings at MD&M West in Anaheim this year (as quoted in Pastic News).

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