Executive Briefings

Fueled by Cheap Natural Gas, Reshoring Predicted to Continue, But Pace Is Expected to Slow

Manufacturers typically evaluate seven critical areas when it comes to operational decision making: transportation and energy costs; market demand for their products; rising labor costs in China and other developing nations; access to talent, tax and regulatory policies; availability of capital; and currency trends.

In 2015 we will see jobs continuing to come back to America as trends around these divergent areas continue to work favorably for bottom lines. But this reshoring will happen in a more targeted way, with natural gas use serving as a driving factor in some cases.

The growing abundance of natural gas in the U.S. provides more affordable energy for factories, as well as new opportunities for products and services. PricewaterhouseCoopers estimates that high shale gas recovery and low prices could add one million U.S. manufacturing jobs and reduce natural gas costs by up to $11.6bn annually through 2025. In fact, one particular U.S. steel manufacturer has already invested more than $100m in a Midwest plant to help meet demand for tubes and pipes used in shale gas extraction activities.

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In 2015 we will see jobs continuing to come back to America as trends around these divergent areas continue to work favorably for bottom lines. But this reshoring will happen in a more targeted way, with natural gas use serving as a driving factor in some cases.

The growing abundance of natural gas in the U.S. provides more affordable energy for factories, as well as new opportunities for products and services. PricewaterhouseCoopers estimates that high shale gas recovery and low prices could add one million U.S. manufacturing jobs and reduce natural gas costs by up to $11.6bn annually through 2025. In fact, one particular U.S. steel manufacturer has already invested more than $100m in a Midwest plant to help meet demand for tubes and pipes used in shale gas extraction activities.

Read Full Article