Seven “tipping point” sectors are poised to return to the U.S. for manufacturing: transportation goods, computers and electronics, fabricated metal products, machinery, plastics and rubber, appliances and electrical equipment, and furniture. Combined with increased U.S. exports, these industry groups could boost annual output in the economy by $100 billion, create 2 to 3 million jobs, and lower the U.S. non-oil merchandise trade deficit by up to 35 percent beginning in the next five years.
These are the key findings from our latest research on the shifting economics of worldwide manufacturing. They build on our analysis released earlier this year predicting a U.S. “manufacturing renaissance.” In the next five years or so, we project that China will lose most of the huge cost advantage over the U.S. that it has enjoyed since it joined the World Trade Organization (WTO) in 2001. As a result, many companies will rethink where they produce certain goods meant for sale in North America. And in the wake of our latest research, we can be more specific about which industry clusters are most likely to return and why.