August 14, 2012
The onshoring of jobs to the U.S. and other Western developed countries will continue strongly through 2020, according to CoreNet Global, an association of corporate real estate executives in Atlanta. Earlier this year CoreNet released Corporate Real Estate 2020 (CRE 2020), a forward-looking study of corporate workplace and real estate trends.
In a survey conducted in conjunction with the CRE 2020 research, 51 percent of corporate real estate asset managers either agreed or strongly agreed that there would be a rebound in domestic manufacturing from offshore locations. This recovery will be driven both by companies bringing manufacturing plants and jobs back to the U.S. or choosing not to offshore in the first place, according to the report.
U.S. manufacturing jobs have rebounded from a 10-year low of 11,458,000 in January 2010 to a projected 11,962,000 ending June 2012, according to the U.S. Bureau of Labor Statistics. The 4.4 percent increase marks a gain of more than a half million new jobs.
One factor enabling the reshoring phenomenon is that companies are relying more on technology and automated production processes to reduce labor content and boost productivity. Another key driver is that transportation and labor costs associated with offshoring are rising and chipping away at the cost advantage associated with offshoring facilities.
An additional factor is that manufacturing at home avoids a growing problem for major corporations operating in China and other developing markets — the lack of protection of intellectual property.