Home again: America’s reshoring initiative is bringing manufacturing back to the U.S.

By James A. Schnur, CCIM
President and Designated Managing Broker
Integrated Real Estate Solutions

For decades, American manufacturers were sending their production overseas, with all the jobs and revenue that went with it, like the cost to maintain factories. Meanwhile, unemployment increased here, along with vacancies of production facilities.

In 2010, the Reshoring Initiative was founded, a collaboration of professionals dedicated to the promotion of “insourcing, onshoring, rightshoring, and backshoring) and FDI (Foreign Direct Investment)”. The organization has been integral in returning hundreds of thousands of manufacturing jobs back to the United States.

Government incentives, the availability of skilled labor and training, proximity to customers and markets, and the positive impact on a company’s brand image have contributed to the reshoring of America. Leading manufacturers who have reshored their production include GM (12,000 jobs) and Boeing (7,800). Ford, Intel, GE, Caterpillar, and Polaris have each brought more than 2,000 jobs back to the United States in the past ten years.

Reasons to reshore

According to an Area Development article, “Reshoring Gains Traction in U.S. Manufacturing”, these businesses are seeing the value of keeping their supply chain on American soil:

  • Improved quality and safety
  • More reliable and less costly shipping
  • Shorter and more reliable supply chain movement
  • Faster decision-making capability
  • Increased American job creation
  • Positive impact on the national economy
  • Improved branding with “Made in America”

Harry C. Moser, the Reshoring Initiative’s founder and president, added that “regaining a ‘Made in America’ label is the fourth most frequently mentioned reason for reshoring, out of the 43 reasons we track.”

Can commercial real estate reassure the reshoring?

The success of reshoring is great news for the country, but the growing migration could present a challenge for some businesses. The availability of industrial space is tight at the moment. Finding the right space for production isn’t an easy task. To avoid making compromises that could impact their success, reshoring manufacturers are working with commercial real estate experts here in the U.S. to make a smooth transition. These agents are doing more than finding property. Their success relies on a wide range of skills—everything from identifying workforce availability to keying in on infrastructural issues to support today’s automated factories.

The demand is sparking construction in key markets, where spec buildings are on the rise, responding to the demand for more industrial space. Chicago, a central location that’s desirable for manufacturing and distribution, is one of the major cities expanding its inventory with new construction.

Challenge creates opportunity

One of the other benefits to result from the resurgence of American manufacturing is the opportunity for businesses here to maximize their investment in industrial property. An operation with excess capacity could lease that space to a supplier or provide it as part of a supplier contract with that company to reduce costs.

An outgrowth of increasing automation is the need for less space than you might imagine. Shorter turnaround on shipments that no longer come from overseas could reduce the amount of inventory needed to keep on hand, thereby increasing cash flow. Manufacturers are also relying on their suppliers to hold their inventory when warehouse space is unavailable to them.

Whether you’re a manufacturer or supplier, reshoring represents an opportunity to make a positive impact on your business, the American worker, and the economy. To be successful on this multiple bottom line, utilize the knowledge, resources, and services of a commercial real estate professional. Integrated Real Estate Solutions fits these criteria and welcomes the chance to guide you through this exciting transition in your business. Contact us to reshore responsibly.

Integrated Real Estate Solutions, Inc. provides clients with the in-depth knowledge and experience that is critical to determine the right path to your next move, lease renewal, or strategic repositioning of your real estate portfolio. Contact us or call 847.550.0160 today about your needs, and put our success to work for you.

Author: Jim Schnur

Jim Schnur is the President and Designated Managing Broker of Integrated Real Estate Solutions, Inc. Jim started the firm in 2003 after almost 20 years negotiating and overseeing real estate transactions at Hewlett Packard Co. and Agilent Technologies, Inc.