You should always be skeptical of statistics written this way. It is a very unintuitive way to aggregate and suggests that this is the strongest number they could find.
Near $120 billion spent on new manufacturing facilities in 2022 alone. The surge looks like this:
https://i.imgur.com/Bydq6Hb.png
The US manufacturing sector has added 900,000 jobs since 2014 (according to the US Bureau of Labor Statistics). It was at 12,081,000 manufacturing jobs in January 2014, and January 2024 is at 12,979,000. For the US, which is supposed to be a wilting manufacturer, that's a huge gain over a decade (including the pandemic hit, which slashed 700,000 jobs out temporarily; one guesses the figure would just be even higher minus the pandemic).
Manufacturers don't add a million jobs if they're not expanding presence. Even if they were expanding very slowly, they would do everything possible to avoid adding jobs/labor (most US manufacturing expansion in decades past came from productivity gains).
The US has modest corporate taxes, a good business regulatory environment, amazing capital markets, enormous economic scale, a single giant market, ports that can easily get you to Asia/Europe/Latin America, consumers, and labor. It makes perfect sense that at a time of growing risk of conflict with China, that the US would be reshoring.
That is 7.4% growth since 2014.
US population grew by 6.4% during that same period. Hard to see the "huge gain" here.
Yep!
> ports that can easily get you to Asia/Europe/Latin America, consumers,
Yep!
> and labor
Nope. Labor costs in the US are ridiculous and make it non-economical for most consumer manufacturing. This is why real output remains low and we are exploring 'friend-shoring.'
US: >Real median household income was $74,580 in 2022
UK: >In the financial year ending (FYE) 2022, median household income in the UK before taxes and benefits was £35,000, increasing to £38,100 after taxes and benefits.
...
Increased labor costs... versus rapid, $$ last-minute transport / port fees to hide latency across the Pacific.
At some point, it's just cheaper to pay the manufacturer more, if they can more rapidly respond to demand.
Canada and Mexico have multiple entry points without as severe risk.
Looks like an inflation graph to me.
Price cap is poorly enforced. All economic sanctions applied to Russia are poorly enforced thanks to globalization and lack of political will of western countries.
Sanctions are severe on paper, but in real life just adds some extra friction.
Unfortunately we are living in times when there are only weak populists in the government.
I wish the next is president will be someone like Reagan, but it is impossible.
The US can no longer afford to be world police with its navy.
Russia is now outside of the US economic system, while relations with China continue to deteriorate. It will deteriorate further once China attacks Taiwan.
Russia is not really cut off from the global trade.
Africa becomes more united and collected.
Globalization is still a trend.
Russia is cut off from the developed Western economy. Some NATO commanders are also warning that Russia will not stop at Ukraine.
Even if Russia and China weren’t on a war path, the US simply cannot continue to subsidize global defense of trade via our navy. Currently, only the UK and Japan have a sizable fleet of long range ships, but they still don’t compare to the US navy.
Yes, globalism is still here, but the trend is that it will be on a major decline in the coming years. Destabilizing geopolitics will only hasten it.
And yes, they will never stop because they have an empire mentality. Make Russian empire great again! Russian are ready to kill anyone and die for promise to get 2000$ per month from their government.
Some hicks in the rust belt contribute and receive very little benefits from a fee trade empires existence and are thus usually left to there own devices by both parties.
Common misconception that the US controls the world dollar. The Eurodollar has been where the world's trade has been pegged for half a century, the US simply benefits from a massive economy and it being their native currency.
This is like saying the US controls the world through ubiquity of "English" as a business language. No, but they definitely benefit from it. You can choose to speak any other language, or use any other reserve currency that you like.
Some people confuse the "global" trade to the American & Friends trade.
From the other hand, Russians can buy anything western they want, just with more friction and higher price. Even dual-purpose western components for army are freely available for them.
I think if USA would naval blockade itself then many, many people would give a sigh of relief.
Manufacturing hubs are shifting hands, but globalism isn't ending. Companies can still get away with paying $10 a day or less to people in some countries and they're never giving that up.
One thing to keep in mind: a few years ago, South Korea with North Korea to allow corporations to do manufacturing in North Korea. [1] The result: mega corporations like Korea's Hyundai and Japan's Family Mart flooded in to take advantage of cheap (probably even slave) labor. It closed not because companies felt morally wrong about it--it closed because the governments forced it to close.
'Some' is doing a lot of work. What does that really mean? If 99% of manufacturers each onshore 0.01% of their manufacturing, all that has really happened is that everyone can probably now label things "made in america".
U.S. manufacturing construction spending reached a 20-year high, hitting a $194 billion annual rate in April 2023, nearly double the $107 billion annual rate from a year ago. https://thinkkc.com/news/blog/kc-smartport-blog/2023/08/01/i...
In 2021, Intel announced more than $43.5 billion in new manufacturing investments across Arizona, New Mexico and Ohio to bolster U.S. chipmaking and R&D leadership. https://www.intc.com/news-events/press-releases/detail/1638/...
Walmart previously announced a $350 billion investment to make U.S. manufacturing more “affordable and feasible,”
https://www.sme.org/technologies/articles/2023/october/resho...
A nominal 20-year high and the increase is since the pandemic. Also this is for construction. Here are some other time series: https://fred.stlouisfed.org/series/OUTMS
Walmart $350 billion investment is over 10 years and mostly is for agriculture and some small electronics.
Also this source is an American manufacturing lobbying group.
companies have announced over $166 billion in manufacturing in semiconductors and electronics, and at least 50 community colleges in 19 states have announced new or expanded programming to help American workers access good-paying jobs in the semiconductor industry. https://www.whitehouse.gov/briefing-room/statements-releases...
Apple commits $430 billion in US investments over five years https://www.apple.com/newsroom/2021/04/apple-commits-430-bil...
Microsoft will buy enough U.S.-made solar panels to power 1.8 million homes https://www.greenbiz.com/article/microsoft-will-buy-enough-u...
Tesla plans to spend $3.6 billion more on battery and truck manufacturing in Nevada https://www.cnbc.com/2023/01/24/tesla-plans-to-spend-3point6...
US manufacturing never recovered from the 2008 crisis. And in 2005, the output of manufacturing was higher than it is today (in real value terms, not funny dollars).
So in 2023 maybe there was some other big one off?
Of course a factory is still a factory, so the one-off thing is a bit misleading, but what I try to say that it seems one big factory takes 40% of investment. What would be the spending for 10? 400 bilion? One is still better than zero though and probably has subcontractors.
- Chinese stock market has dropped 11% this year, with 3 year cumulative loss of 6 trillion in 3 years https://www.cnn.com/2024/01/23/investing/china-stock-market-...
- Chinese economy is suffering from deflation
- China’s youth unemployment rate hit consecutive record highs in recent months. From April to June, the jobless rate for 16- to 24-year-olds reached 20.4%, 20.8% and 21.3% respectively
If your thesis is that world manufacturing is leaving China to return (primarily) to the US that seems unlikely. More likely it will move to places like Africa and South America, no? We would expect that to happen as China economy transitions and they become the dominant world super power.
That's not evident in the persistent high youth unemployment rate. There is also something called middle income trap https://en.wikipedia.org/wiki/Middle_income_trap
> they become the dominant world super power.
There's no sign that that is guaranteed. No sign in culture power. No sign in economic power. No sign in demographics power. No sign in innovation power. No sign in technology power. No sign in military power.
They're on course to become the biggest economy in the world. Popularity of their culture is surging (though from a very low baseline) - you hear a lot more about Chinese movies/novels/games, or even software, than even a couple of years ago. Innovation and technology are hard to measure, but on measures like scientific papers published or patents registered they're also surging. There's plenty to criticise about the Chinese government and Chinese culture, but there are definitely significant signs of success.
They are not:
https://www.bloomberg.com/news/articles/2024-01-25/us-extend...
> Popularity of their culture is surging
Not as popular as Korean or Japanese, or arguably Indian.
> but there are definitely significant signs of success.
This is true. The very fact that China is considered a super power shows that they have made tremendous progress.
No. Africa and South America largely lack in basic infrastructure, political stability, and workforce education. You can't do advanced modern manufacturing in places like that. Brazil has some promise, and maybe Nigeria and Chile, but that's about it. Brazil still has major stability problems, not sure about the others.
I'm not arguing the point, mostly because I still don't have reliable evidence to argue about.
With no numbers or rules for the numerator and the denominator, and no clear methodology, and no clear understanding of the biases and the agendas of the authors, these ratios are meaningless.
I'm not touching the rest, but this seems like an obvious fig leaf for largely failing to bring production home.
> Contrast that to the US and Europe who keep talking about these things, but don't actually execute(although the US at least tries to throw money at the problem).
"Our analysis of multiple surveys indicates that as much as 91 percent of U.S. manufacturers have reshored some production in 2022, up from just 7 percent 2012. " https://www.assemblymag.com/articles/98200-a-look-back-at-20...
China's annual exports drop for first time in seven years. Among key trading partners, exports to the U.S. led the decline, down 13% from the previous year https://asia.nikkei.com/Economy/Trade/China-s-annual-exports...
> TSMC lost the Chinese market...South Korean officials on the other hand lobbied heavily to get long term exemptions, which allowed them to turn around their profit situation.
Samsung profit tumbles 35% as chip weakness persists. https://www.scmp.com/tech/big-tech/article/3248969/china-rem...
Over 50% of Korean firms missing earnings target in China this year: survey https://www.koreaherald.com/view.php?ud=20230830000611