Study: offshoring decline boosts U.S. manufacturing

A slowdown in offshoring activity has helped revive manufacturing in the United States, with about 50,000 jobs added domestically in the past 12 months, according to a study from TD Economics, an affiliate of TD Bank.

The study, "Offshoring, Onshoring, and the Rebirth of American Manufacturing," says that the uptick in onshoring stems from a combination of global and domestic factors. Globally, the cost advantages of offshoring have been weakened by a combination of rapidly rising Chinese wages, the appreciating value of the Chinese renminbi, and volatile transportation rates.

Domestically, leaner and more flexible supply chains, a trend towards mass-customization, and access to natural gas from shale formations have made U.S. manufacturing more viable, the report found.

The report noted that offshoring has "slowed to a trickle" in two industry categories: computers and electronics and plastics and rubber. Those and other capital-intensive industries like machinery, fabricated metals, and electrical equipment will lead the on-shoring trend for U.S. manufacturing, according the report author Michael Dolega.

On the other hand, labor-intensive industries such as apparel and textiles will likely remain offshore, the report said.