The Pandemic Is Spurring U.S. Manufacturing When Tariffs And Politics Couldn’t

The Trump tariffs couldn’t do it. Chinese politics didn’t move the needle one little bit. Currency exchange rates, long lead times and patriotic jingoism had no real effect either.

But the two-years-and-counting global pandemic conditions are finally doing what all those other factors couldn’t: Getting companies to start bringing at least some manufacturing back to the United States…or at least talking about it.

Hard numbers are difficult to come by given the rolling shutdowns of manufacturing facilities in the country due to the waves of Covid that have caused enormous numbers of workers to call out sick.

But both anecdotal reports from various industries and attention-grabbing headlines about domestic manufacturing start-ups seem to indicate that there is at least some movement going on.

One recent hard-news report comes from a North Carolina Community Investment report that said the number of jobs in the state’s textiles industry had increased by 1,400 between January 2020 and December 2021. It also reported that more than $285 million worth of investments had been made in the state in this sector over the same period. This includes facilities spinning yarn, making fabric and manufacturing finished apparel and other products.

The textiles industry, once a mainstay of states like North Carolina, was hit particularly hard by the push to move manufacturing offshore to China, India and elsewhere in Asia where labor costs were significantly lower, often just 10% or even less when compared to domestic manufacturing. And while this increase of the past two years is noteworthy, the new jobs created are just a fraction of the tens of thousands of jobs lost in the transition off-shore.

Other consumer product industries like furniture, home textiles and even giant sectors like automotive have also talked about doing more domestic manufacturing as lengthy delivery times, radically increased costs in shipping and transportation and other factors have made offshore manufacturing less attractive from a cost standpoint.

Observers expect the trend to continue. “It’s unusual to see positive economic indicators paired with historic labor and supply chain challenges,” financial consulting company Deloitte recently wrote in a market analysis. “But this is the trajectory for the US manufacturing industry in 2022 emerging from the pandemic. The recovery gained momentum in 2021 on the heels of vaccine rollout and rising demand. As industrial production and capacity utilization surpassed pre-pandemic levels midyear, strong increases in new orders for all major subsectors signal growth continuing in 2022.”