The US is in the early stages of a manufacturing renaissance and the sector is set to see future growth, according to an expert from Baltimore-based investment agency Brown Advisory. Brown’s head of investments, Paul Chew, said that the growing trend among US-based companies to reshore their manufacturing operations has been largely driven by decreasing domestic energy prices, which is having a direct impact on the cost of production and logistics in the country.

Manufacturing costs in the US have also declined as a result of the weak dollar exchange rate against both the yen and the euro. Reshoring has been also boosted by the availability of competitively priced real estate in the US, especially in rural areas. This has coincided with a general rise in the price of Chinese real estate, particularly in coastal regions. In many parts of the US, there is also the added incentive of subsidies, which many state promotional agencies are offering to businesses.

Advertisement

Mr Chew noted, however, that many of the US-based businesses that have reshored their manufacturing operations have opted for highly automated manufacturing processes, meaning that job creation is not as high as it could be. But Brown maintained that the reshoring trend will still have a significant impact on the US economy.