Here's the headline: Corporations are with increasing frequency re-opening factories they previously closed. Further, companies taking a hard look at their options for growth are choosing to open plants in a number of U.S. states, in particular those locales with the lowest labor costs and unionization rates.
National Real Estate Investor Online reported recently that when it comes to deciding where to build factories, corporations weigh several factors -- total costs including supply chain efficiency and infrastructure, quality, price and availability of labor, proximity to customers and suppliers, taxes and incentives, external risks and shipping, and real estate.
This "Onshoring" phenomenon that finds companies previously producing products off-shore announcing plans to invest millions of dollars on new plants. The net effect? The return of manufacturing jobs to the U.S. Thus far, companies that have announced such plans include Honda (which is a major automobile manufacturer here in Ohio), General Electric, Whirlpool, Otis Elevator, Master Lock, and others.
According to NREI Online, there has been a steady increase in manufacturing jobs since 2010 in the U.S., and this sector -- much to the delight of my commercial real estate colleagues focused on industrial and manufacturing properties -- is expanding at an annual pace of roughly 2 percent.
All this is happening without federal government incentives. It is all based on the factors above, but mostly, again most heavily influenced on locales with low labor costs and low union membership.
Should be interesting to watch this trend in the next 36 months to see how it changes.
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