Over the past several years, numerous studies and articles have touted the “reshoring” of manufacturing jobs to the U.S., leading readers to believe that large numbers of net new manufacturing jobs will be created here. A recent study prepared for and funded by the NAIOP Research Foundation — written by L. Nicolas Ronderos, New York director of Regional Plan Association — concludes, however, that the net result of this reshoring trend will be stabilization of manufacturing jobs rather than net growth. Some industries will add jobs as others shed them, resulting in no change to the total number of manufacturing jobs.
According to “Stabilization of the U.S. Manufacturing Sector and Its Impact on Industrial Space,” after losing six million jobs between 2000 and 2010, the sector in the aggregate is expected to stop losing jobs and level off at an employment level of roughly 11 million jobs between now and 2020. In other words, the sector is projected to add as many jobs as it sheds in the coming years, changing a decade-long trend of losing more jobs than have been added.
What does this mean? Overall, employment stabilization in the manufacturing sector bodes very well for the employment picture in the overall economy. While industrial-related jobs are projected to level off, service jobs are projected to continue to be added on a net basis. The result is that 20 million net new jobs are projected to be created in the U.S. between 2013 and 2002, compared to the slight loss of about five million jobs that occurred between 2000 and 2010.
Of most importance to the real estate community, which industries will expand, where are they located, and how much space will they need? The table at left presents some answers. The report indicated that, in general, industries creating products that require low levels of labor, such as chemicals and technology, likely will expand in the U.S. in terms of their overall output, but will not necessarily expand in terms of their square footage requirements.
For more information:
“Stabilization of the U.S. Manufacturing Sector and Its Impact on Industrial Space” by L. Nicolas Ronderos, NAIOP Research Foundation, June 2013.