The Reshoring Initiative Builds Momentum
The Star Tribune recently ran an article, entitled “Reshoring Trend Picks Up in Minnesota.” The article noted that due to the increased labor and ocean-freight costs, companies were choosing to reshore, and bring back manufacturing work to the United States.
Sue Helper, chief economist with U.S. Department of Commerce, was quoted as saying, “There are two main reasons why companies are coming back. One is the convergence of labor costs and the other big factor is that U.S. companies are realizing that there are a lot of hidden costs to offshoring.”
According to the article, many U.S. companies are determining that it’s more trouble than it’s worth to make goods abroad in the hope of capturing cheaper wages. In countries, like China, there has been an increase in wages. Couple that with delivery delays, issues of quality, and intellectual property infringement, companies are starting to rethink hiring offshore contract manufacturers.
Chad Moutray, chief economist for the National Association of Manufacturers, stated that members are also choosing to bring work to the U.S. because of lower energy costs – driven largely by the shale oil boom in Texas, Pennsylvania, and North Dakota.
Wow, this is exciting news!
Some of the biggest names in American manufacturing (General Electric, Whirlpool, Ford, and 3M) have become reshorers. Wal-Mart Stores Inc. is now encouraging the reshoring trend “by telling suppliers it aims to spend an additional $50 billion on U.S.-made products over the next 10 years.”
The employees of Laser 1 Technology couldn’t be happier. We believe that Made in the U.S.A. is what will bring about further economic change.
Laser 1 already benefits from reshoring. We have gained solid customers that have placed orders with us and we are in the process of negotiating a basis for a strategic partnership.
Are you looking to reshore? We are willing and open to securing needs for capital expenditures and handling production. We’ve already secured $2M in production work based on the reshoring initiative. And that’s only the tip of the iceberg.
Give us a call today to discuss all your manufacturing needs. (651) 451-3444
According to Minnesota Management & Budget’s February 2015 economic forecast Minnesota’s economic expansion continues to make steady progress.
According to MMB, Minnesota added more than 50,000 jobs since employment surpassed its pre-recession peak in 2013, and most indicators suggest the labor market is tightening up. Minnesota’s jobless rate dropped to 3.6 percent in December 2014, its lowest mark since early 2001 and the fifth lowest among states. In fact, the Minneapolis-St. Paul area had the lowest jobless rate of any large metropolitan area in the nation, 3.3 percent.
MMB’s economic forecast indicates, “Minnesota’s expansion to continue to accelerate over the next several years, but at a generally slower pace than the national average. Employment growth is expected to remain modest in 2015 and 2016, and the pace of wage growth is projected to steadily pick up steam. This reflects improvements in household formation and labor force growth, a rebound in labor productivity, and stronger fundamentals in the broader U.S. economy.”
On April 29, 2015, the Economics Group of Wells Fargo Securities, recorded that Minnesota’s unemployment rate was holding steady at “an exceptionally low 3.7 percent, or 1.8 percentage points below the national average.” The manufacturing industry seeing some resurgence and overall, “The diversity of the state’s economy has allowed Minnesota to weather storms better than its peers and helped to foster broad-based growth.”
The Economics Group further noted that, “Manufacturing is beginning to bounce back and should continue to make gains as the national and global economies demand more of the myriad goods that are produced in the state. The labor market is also exceptionally tight and has led to stronger wage gains, which should boost incomes and fuel gains in retail sales, household services and leisure and entertainment.”