A $10 Trillion Opportunity in US Reshoring

A $10 Trillion Opportunity in US Reshoring

After decades of offshoring, the pendulum for US manufacturing is swinging back toward domestic production. Our US Multi-Industry Analyst Chris Snyder looks at what’s behind this trend.


----- Transcript -----


Welcome to Thoughts on the Market. I’m Chris Snyder, Morgan Stanley’s US Multi-Industry Analyst. Today I’ll discuss the far-reaching implications of shifting industrial production back to the United States.

It’s Friday, October 25th, at 10am in New York.

Global manufacturing is undergoing a seismic shift, and the United States is at the epicenter of this transformation. After decades of offshoring and relying on international supply chains, the pendulum is swinging back toward domestic production. This movement – known as reshoring – is not just a fleeting trend but a strategic realignment of manufacturing capabilities that is indicative of the “multipolar” theme playing out globally.

In fact, we believe the US is entering the early innings of re-Industrialization – a multi-decade opportunity that we size at $10 trillion and think has the potential to restore growth to the US industrial economy following more than 20 years of stagnation.

The reshoring of manufacturing to the US is fueled by a combination of factors that are making domestic production both viable and lucrative. While the initial sparks were ignited by policy changes, including tariffs and trade agreements, the COVID-19 pandemic laid bare the risks of elongated supply chains and over-dependence on foreign manufacturing.

Meanwhile, the diffusion of cutting-edge technologies, such as automation, artificial intelligence, and advanced robotics, has diminished the cost advantages of low-wage countries. The US -- with its robust tech sector and innovation ecosystem -- is uniquely positioned to leverage technology to revitalize its manufacturing base.

Who are the direct beneficiaries? High-tech sectors, such as semiconductors, pharmaceuticals, and advanced manufacturing systems, are likely to be the biggest winners. Traditional industrial sectors, such as automotive and aerospace, are also seeing a resurgence. Finally, companies that invest in more sustainable manufacturing processes stand to gain from both policy-driven incentives and a growing market demand. All told, these businesses should see shorter supply chains, reduced legal and tariff costs, and a more resilient operational structure.

As for the broader US economy? We think the implications are pretty profound. In altering the US industrial landscape, reshoring promises not only to boost GDP growth, but it could also stabilize and potentially reverse the trade deficits that have plagued the US economy for years.

Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.

Episoder(1510)

Special Episode: Markets Parse Election Results, Jobs Report

Special Episode: Markets Parse Election Results, Jobs Report

All eyes are on the U.S. Presidential race as markets also weigh climbing coronavirus cases in the U.S., fiscal stimulus uncertainty and October’s jobs report.

6 Nov 20208min

Michael Zezas: Breaking - Why Post-Election Day Just Got Trickier

Michael Zezas: Breaking - Why Post-Election Day Just Got Trickier

Amidst the uncertainty, three topics should be front of mind for investors: implications of a divided government, the path to fiscal stimulus and tax changes.

5 Nov 20202min

Mike Wilson: Is the Worst of the Correction Over?

Mike Wilson: Is the Worst of the Correction Over?

Although some volatility may lie ahead, the end of the U.S. election cycle and progress on a potential coronavirus vaccine may bring some optimism to markets.

2 Nov 20203min

Andrew Sheets: A Transformational Sweep?

Andrew Sheets: A Transformational Sweep?

A look at the 2008 and 2016 U.S. elections suggests that a sweep by either Democrats or Republicans could push stocks and bond yields higher in 2021.

30 Okt 20202min

Michael Zezas: Election Night Strategy for Investors

Michael Zezas: Election Night Strategy for Investors

For investors, election night could hinge on moments when markets conclude who has won, not necessarily on when media networks call a winner.

28 Okt 20202min

Mike Wilson: 3 Sticking Points for U.S. Equities

Mike Wilson: 3 Sticking Points for U.S. Equities

U.S. equity markets have been stuck range bound due to three key concerns, but investors could use that uncertainty to their advantage.

26 Okt 20203min

U.S. Election 2020: Divided Government Scenarios

U.S. Election 2020: Divided Government Scenarios

In part two of our special election episode, we look at the policies that could potentially come out of divided party control among the White House, Senate and House, and how they might impact markets.

23 Okt 20207min

U.S. Election 2020: Straightaways and Detours

U.S. Election 2020: Straightaways and Detours

What is the road ahead for global markets between now and inauguration day? The answer may fall into two categories: straightaways and detours. Part one of a special two-part episode.

22 Okt 20209min

Populært innen Business og økonomi

stopp-verden
dine-penger-pengeradet
e24-podden
rss-penger-polser-og-politikk
kommentarer-fra-aftenposten
rss-borsmorgen-okonominyhetene
finansredaksjonen
lydartikler-fra-aftenposten
rss-vass-knepp-show
pengepodden-2
tid-er-penger-en-podcast-med-peter-warren
livet-pa-veien-med-jan-erik-larssen
stormkast-med-valebrokk-stordalen
morgenkaffen-med-finansavisen
rss-sunn-okonomi
rss-rettssikkerhet-bak-fasaden-pa-rettsstaten-norge-en-podcast-av-sonia-loinsworth-og-foreningen-rettssikkerhet-for-alle
utbytte
okonomiamatorene
lederpodden
rss-markedspuls-2