As offshoring becomes more expensive, manufacturers look at domestic markets again


[image credit: Newman & Winston]

Manufacturing abroad requires a huge cost differential

The 1990's and 2000's saw a huge surge in offshoring, as manufacturers took advantage of cheap labor and lax protections for workers in developing markets, and abandoned domestic operations to ship roughly 35% of manufacturing jobs overseas; but offshoring is only feasible in the presence of a significant cost differential. As foreign workers demand better conditions and fuel costs rise, manufacturers are finding it harder to justify the time and fuel required to ship materials across the sea and navigate the bureaucratic hassles of operating in a foreign environment.

Solution: Reinvest in the community by bringing jobs back home

Manufacturers are starting to see the benefits of relocating production back to the U.S., and are taking advantage of tax incentives and positive public relations to do so. Manufacturing is one of the largest growing sectors in the U.S., having added nearly half a million jobs since 2010. In fact, such is the demand for skilled labor, that employers are finding it difficult to source enough machinists, electricians, and other "middle-skill" workers to fill all available openings.

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Category: Employment


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Article by: Dave

Dave Cannon is a Seattle-based entrepreneur and consultant to nonprofits and small businesses. He loves Thai food and takes terrible photographs. You can follow him on Linkedin.
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