A lot of politicians claim to create thousands of high paying American manufacturing jobs, but in this case it appears COVID, Russia and China have done the work for us. As I noted in my latest weekly business notes (https://bit.ly/3GuaLq8), the collapse of the global supply chain is forcing manufacturing to revaluate how and where they make things.
The European energy crisis is real and threatens German manufacturing. I hear tales of consumers being asked to lower their thermostats and smart money is predicting a partial or total shutdown of factories.
Meanwhile on the other side of the planet, China's COVID zero policy in addition to the US Government's restriction on chip manufacturing export is strangling manufacturing. Rising labor costs and a bursting real estate bubble aren't helping things.
I say all that to say this: Manufacturing will return to the US, but it won't look like 30 years ago. High tech industries will thrive, while lower complexity components will be outsourced to Mexico and further south. Cheap energy will be a the center of this revival, for example the average of 11-13 cents per kW⋅h in many places.
The bottom line is that reshoring of American manufacturing is good for everyone. It's easy to forget, Tech that accounts for only 22.4% of all jobs, that high wage skilled labor is key toward a healthy middle class. Politicians might make promises, but they provide precious little momentum in the winds of global macro change. It could be argued that long term policy does have an impact, but that is a topic for another day.
The European energy crisis is real and threatens German manufacturing. I hear tales of consumers being asked to lower their thermostats and smart money is predicting a partial or total shutdown of factories.
Meanwhile on the other side of the planet, China's COVID zero policy in addition to the US Government's restriction on chip manufacturing export is strangling manufacturing. Rising labor costs and a bursting real estate bubble aren't helping things.
I say all that to say this: Manufacturing will return to the US, but it won't look like 30 years ago. High tech industries will thrive, while lower complexity components will be outsourced to Mexico and further south. Cheap energy will be a the center of this revival, for example the average of 11-13 cents per kW⋅h in many places.
The bottom line is that reshoring of American manufacturing is good for everyone. It's easy to forget, Tech that accounts for only 22.4% of all jobs, that high wage skilled labor is key toward a healthy middle class. Politicians might make promises, but they provide precious little momentum in the winds of global macro change. It could be argued that long term policy does have an impact, but that is a topic for another day.