Time to ‘Curb Your Enthusiasm’ about Reshoring
The COVID-19 pandemic put a big spotlight on the lack of medical equipment and drugs manufactured in the United States. As a result, lawmakers have put a greater emphasis on reshoring healthcare manufacturing and manufacturers have begun looking more closely at their supply chains.
However, investment analysts told CNN that reshoring healthcare manufacturing doesn’t automatically equate to an increase in jobs. “Curb your enthusiasm since the penicillin industry is not going to mean a ton of jobs or manufacturing coming to the United States,” said Jeff Kleintop, chief global investment strategist at the Schwab Center for Financial Research.
Experts also said that non-essential manufacturers have little reason to return home. Bringing manufacturing operations back to the United States means higher cost of labor, capacity restraints and ignoring production specialization available, CNN said.
“I think it will tend to regionalization,” said Simona Mocuta, senior economist at State Street Global Advisors. “Not bringing the production to the home country but closer to where it needs to go.”
Advisors Asset Management CEO and Chief Investment Officer Scott Colyer told CNN that a lot more trade will go away from China, but he doesn’t think it will come back to the United States. “Companies will be looking at ‘where is my No. 1 supplier, where is my No.2,’” he explained.