OPINION:
I have one manufacturing client in New Jersey and another in Georgia, both of whom are expanding their businesses. “We have large customers who would prefer to buy from us than overseas,” my New Jersey client told me.
A U.S. manufacturing resurgence is already underway, and policy is accelerating it faster than many expected.
In April, the Institute for Supply Management’s manufacturing purchasing managers index registered its fastest expansion since August 2022. Four of the six largest manufacturing industries (transportation equipment, computer and electronic products, machinery, and chemical products) reported expansion.
The Wall Street Journal’s Greg Ip recently reported on the “stealth manufacturing boom” in the U.S. He cited many examples, including the “booming” rise in aerospace and transportation equipment.
A recently released report from research firm Kearney said a “significant share of executives” are reporting plans to reshore or increase production in the United States.
The recent report showing U.S. gross domestic product growth at 2% has been largely attributed to corporate capital investment. Reuters recently reported that new orders for key U.S.-manufactured capital goods increased by the most in nearly six years and shipments rose “solidly,” suggesting that business spending on equipment helped drive economic growth in the first quarter.
A recent survey from the National Association of Manufacturers found that 75.3% of respondents felt either “somewhat or very positive about their company’s outlook,” a 5.4-percentage-point increase from last quarter and above the historical average of 74.3% for the first time since the first quarter of 2023.
A report in the online trade magazine Manufacturing Tomorrow said reshoring is making a “decisive comeback as manufacturers bring production and key suppliers closer to customers.” The report cited South Carolina, Mississippi and Texas as the beneficiaries of “the largest investment waves in semiconductors, batteries, industrial infrastructure and related industries.”
In Ohio, General Motors recently expanded its Toledo manufacturing capacity with new investment, part of a broader $830 million plan targeting multiple U.S. facilities to support next-generation vehicle production. GM has already invested more than $6 billion in its U.S. manufacturing footprint over the past year, with hundreds of millions of dollars dedicated toward projects in Michigan.
A California-based drone manufacturer announced that it would invest $3.5 billion to expand facilities domestically and plans to create more than 2,000 jobs to “break free from Chinese supply chain dependence.”
In Louisiana, a large construction company announced a state-of-the-art nuclear fabrication facility project spanning two regions of the state. It is expected to create more than 2,000 jobs.
An industrial additive manufacturing company in Michigan said it will start domestic manufacturing of a key product line near Detroit to address customer concerns about lead times, parts availability and total cost of ownership. The company has recently begun manufacturing another product line in Michigan and said it has launched a “broader plan to bring additional major subsystems into U.S. production.”
Kitchen appliance maker Sub-Zero said it would invest $196 million in an expansion in Iowa to “enhance production capacity while further integrating advanced manufacturing technologies into the facility.” Also in the state, a precast concrete manufacturing facility will open, creating dozens of jobs.
These aren’t isolated announcements. They reflect a broader shift toward domestic production. What is behind this?
As with any major change, the cause is never just one thing. Tariffs, of course, are driving more foreign companies to invest in the U.S. and domestic companies to turn to domestic resources.
Supply chain pain from the pandemic has led many companies to rethink how and where they source their materials. Moving production, design and sales closer together speeds innovation.
Quality control is easier with fewer products coming from multiple, unreliable and difficult-to-test foreign sources. The data center boom is playing a significant role. The Iran war is creating demand for more military equipment.
The One Big Beautiful Bill Act, enacted last year, offered manufacturers enormous tax deductions. Public sentiment, driven by White House messaging, shines a favorable light on companies that keep their operations in the U.S.
Of course, there are challenges. Many manufacturers are grappling with much higher costs, labor shortages, artificial-intelligence-driven upheaval, the uncertainties caused by the Middle East conflict and a polarized political environment.
You can’t expect an expansion of tariffs to turn around decades of crushing economic policy in just a year, but there are signs that the tariffs are already having an impact.
The shift won’t be quick or easy, but the early signals are clear: After decades of decline, U.S. manufacturing is beginning to regain momentum.
• Gene Marks, CPA, runs The Marks Group PC, a financial and technology consulting firm near Philadelphia.
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