Industrial Insights
Friday, June 27, 2025
U.S. Manufacturing Job Market: Reshoring and Foreign Direct Investment
What does the 2024 reshoring and FDI job surge reveal about US manufacturing job market trends for 2025??
The U.S. manufacturing sector is experiencing a significant transformation, with reshoring and foreign direct investment (FDI) fueling a surge in job announcements and capital investment. However, the outlook for 2025 is clouded by policy uncertainty, global tensions, and persistent workforce challenges.
Reshoring and FDI: Record Job Announcements in 2024
The U.S. manufacturing sector delivered impressive job growth in 2024, with reshoring and foreign direct investment generating 244,000 new positions—a testament to the industry's resilience amid global supply chain challenges. Companies wanted to shorten their supply chains and reduce risks from geopolitical issues. They also aimed to avoid costs from new tariffs.
However, this success story comes with significant warnings as manufacturers face an unprecedented combination of workforce shortages, cybersecurity threats, and supply chain vulnerabilities that could derail future growth.
According to the Reshoring Initiative’s annual report it was the second-highest figure on record.
64% of these jobs come from reshoring, while foreign direct investment (FDI) contributes 36%.
This marks the largest margin by which reshoring has outpaced FDI since tracking began in 2010.
The top five industries driving these job announcements are:
Computer & electronic products (35%)
Electrical equipment, appliances & components (31%)
Transportation equipment (9%)
Chemicals (9%)
Machinery (4%)
Geographically, the South and Midwest dominated, accounting for 81% of all reshoring and FDI-related jobs announced in 2024. Texas, Kentucky, and North Carolina led among states, while South Korea, Germany, and Canada were the top countries of origin for FDI-driven projects.
Definition of reshoring:
Reshoring refers to the business strategy of moving manufacturing operations back to the U.S. from overseas. The term can generally be understood as the reversal of offshoring, meaning the relocation of activities that were previously moved overseas back to the home country.
About The Reshoring Movement in U.S. Manufacturing in a Nutshell
For many years, the United States lost its manufacturing jobs to countries with cheaper labor. This led to a decline in factory towns and a loss of millions of middle-class jobs. As a result, the country became more reliant on fragile supply chains that stretch across the globe.
This change is happening fast and is reshaping the American economy. Factors that drive this trend are:
global instability,
national security concerns,
consumer demand,
increased public and private investment.
New laws like the CHIPS and Science Act and the Inflation Reduction Act, along with stronger Buy American rules, higher tariffs, and a focus on making supply chains more reliable, are changing how we think about production costs. At the same time, a new group of consumers wants products that are transparent, ethical, and match their values.
In 2023, companies announced over 287,000 jobs being moved back to the U.S. or nearby—this is the highest number ever recorded. The main industries driving this shift are semiconductors, electric vehicles, clean energy, aerospace, and pharmaceuticals.
This change is supported by advanced automation, AI-driven supply chains, and a renewed sense of national purpose. However, challenges still persist. Labor shortages, infrastructure bottlenecks, rising costs, and changing political dynamics could hinder progress.
Key Drivers: Policy, Risk, and Technology
The 244,000 jobs announced in 2024 represent a continuation of America's manufacturing renaissance, bringing the total job creation through reshoring initiatives to 1.7 million since 2010.
What makes this year particularly significant is that U.S.-based companies exceeded foreign direct investment by the largest margin on record, signaling growing confidence in domestic manufacturing capabilities.
The momentum behind reshoring and FDI was powered by several converging factors:
Massive federal investments—such as the CHIPS and Science Act and the Inflation Reduction Act—have been reshaping the economics of domestic production, particularly in strategic sectors like semiconductors, electric vehicles, and clean energy.
Heightened global instability, especially U.S.-China tensions and supply chain disruptions, has made domestic manufacturing more attractive for risk mitigation.
In 2024, most new manufacturing jobs were in the computer and electronics sector, which accounts for 28% of all jobs announced. The job announcement data shows a clear shift toward high-technology manufacturing. 88% of these jobs are in high or medium-tech fields. This trend continued into early 2025, with 90% of new jobs falling into advanced manufacturing areas. This change highlights the industry's move toward the capabilities of Industry 4.0.
Economic Impact: Jobs, Investment, and Regional Growth
Since 2010, nearly two million jobs have returned to the U.S. due to reshoring and foreign direct investment. Manufacturing jobs have increased to nearly 13 million, the highest level in over 15 years. This growth is helping local economies, especially in areas that were heavily affected by offshoring, and is leading to major investments in new facilities and supply chains.
Critical Risk Factors Threaten Manufacturing Growth
Despite the positive job creation numbers, manufacturers face a complex web of operational risks that could significantly impact future performance.
Supply chain disruptions top the list of concerns, with 71% of manufacturing leaders citing this as a major challenge—a reflection of ongoing global trade uncertainties and transportation bottlenecks.
Policy Instability and Global Trade Tensions
The manufacturing sector enters 2025 facing significant economic pressures that could impact the positive momentum of 2024.
Rising tariffs and trade tensions have created uncertainty for manufacturers with global supply chains, particularly those in automotive, electronics, and heavy machinery sectors.
The Trump administration's new tariff policies, including 25% duties on foreign-made vehicles and parts, are reshaping cost structures and forcing strategic recalculations across the industry.
Early 2025 data suggests a potential slowdown, with projections indicating approximately 174,000 job announcements compared to 2024's 244,000—a decline that manufacturers attribute to policy uncertainty and delayed investment decisions.
Manufacturing purchasing managers' indices have shown a decline in recent months due to production limits caused by supply disruptions related to tariffs.
Proposed tariffs and potential retaliatory measures from China and other countries could dampen exports and slow domestic job growth.
Labor Shortages
The workforce shortage crisis presents perhaps the most immediate threat to sustained growth, with 60% of manufacturers struggling to attract and retain qualified employees.
This challenge is compounded by demographic shifts, as an aging workforce approaches retirement while fewer young workers enter manufacturing careers.
The skills gap has become particularly acute in high-tech manufacturing roles, where traditional training programs fail to meet the demands of automated, digitally-integrated production environments.
The manufacturing skills gap represents a looming crisis that could undermine the sector's recent gains.
Industry projections indicate that 3.8 million manufacturing workers will be needed by 2033, yet 1.9 million positions could remain unfilled due to insufficient skilled talent.
Modern manufacturing increasingly demands workers proficient in automation, robotics, data analytics, and predictive maintenance—skills that traditional training programs have been slow to develop.
đź’ˇ Good to know:
Companies are looking for advanced manufacturing technicians who have skills in IoT technologies. They also need sustainable manufacturing coordinators who can implement eco-friendly processes. These roles are in high demand.
Despite an 83% increase in manufacturing apprenticeships over the past decade, these programs remain insufficient to meet growing demand.
The gap between educational institutions and the needs of the industry has led to a serious shortage in semiconductor manufacturing. The investments from the CHIPS Act need significant workforce development to have the desired effect.
Strategic Implications for Risk Management
For risk management professionals, the manufacturing sector's current trajectory presents both opportunities and challenges that require careful navigation. The concentration of reshoring jobs in high-tech sectors creates new operational risk profiles, as these facilities often require more sophisticated cybersecurity frameworks and specialized emergency response capabilities.
Supply chain risk management becomes increasingly complex as manufacturers balance cost optimization with resilience requirements. The shift toward domestic sourcing reduces some geopolitical risks while potentially increasing concentration risks in specific geographic regions or supplier networks. Companies must develop more robust scenario planning capabilities to navigate the uncertain trade policy environment.
The workforce shortage crisis demands proactive human capital risk management strategies. Organizations that invest early in upskilling programs, apprenticeship partnerships, and retention initiatives will likely gain competitive advantages as labor markets tighten further.
2025 Outlook: Growth Slows, Uncertainty Rises
Looking ahead, the Reshoring Initiative projects 174,000 job announcements in 2025—a notable drop from 2024—citing policy uncertainty and global trade risks as key factors. The pace of reshoring and FDI-driven growth will depend on the resolution of policy questions and the sector’s ability to attract and train a new generation of manufacturing talent.
Industry leaders emphasize that while tariffs can provide short-term protection, long-term competitiveness requires addressing fundamental cost disadvantages through productivity improvements and workforce development.
The success of reshoring initiatives ultimately hinges on creating a supportive ecosystem that includes skilled workforce availability, competitive infrastructure costs, and predictable regulatory frameworks. As Harry Moser of the Reshoring Initiative notes,
Tariffs alone won't rebuild U.S. manufacturing leadership—a comprehensive approach addressing skills, costs, and policy consistency is essential for sustained success.
For risk management professionals and business leaders, the manufacturing sector's evolution presents both unprecedented opportunities and complex challenges requiring sophisticated strategic planning and risk mitigation approaches.
Key insights from the report:
In 2024, companies announced 244,000 new jobs, adding to the 1.7 million jobs filled since 2010.
U.S. companies bringing jobs back home outnumbered foreign investments by a record margin in 2024.
High-tech industries are leading job growth: 88% of jobs created in 2024 were in high or medium-high tech sectors, which is expected to reach 90% by early 2025.
The top industries in 2024 included Computer & Electronics, Electrical Equipment (like EV batteries and solar), and Transportation Equipment.
For 2025, Texas, South Carolina, and Mississippi are the leading states for reshoring and foreign investments.
Asia is the largest source of reshoring and foreign investments, with South Korea, China, and Germany as the top individual countries.
Tariffs have become a major reason for business decisions, appearing in 454% more cases in 2025 compared to 2024, while government incentives have dropped by 49% as past subsidies phase out.
Workforce challenges remain significant: U.S. manufacturing apprenticeships grew by 83% over the last ten years, but more skilled workers are needed to support job growth from reshoring.
Sources:
Wiesmann, Benedikt, Jochem Ronald Snoei, Per Hilletofth, and David Eriksson. 2017. Drivers and barriers to reshoring: A literature review on offshoring in reverse. European Business Review 29: 15–42. [Google Scholar] [CrossRef]
Sustainability 2024, 16(18), 7918; https://doi.org/10.3390/su16187918
https://reshorenow.org/blog/reshoring-and-fdi-job-announcements-reach-287k-second-highest-on-record/
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