Manufacturing resurgence in the United States and North Carolina

September 27, 2023 | Written by: Morgan

Manufacturing in the United States, especially the southeastern United States, has gained significant momentum since the COVID-19 pandemic. This past week, Area Development Magazine featured an article by Brian Gallagher outlining why manufacturing is experiencing a comeback. I will share a few insights from that article along with a few of my own.

Historically, North Carolina has been attractive for manufacturing projects; however, this recent investment boom is propelled by more than what has led to our success in the past, including reshoring, foreign direct investment (FDI), emerging technologies, government incentives, the transition to clean energy, consumer demand, and more. Let’s take a closer look at reshoring, a major catalyst for this manufacturing resurgence, and discuss the broader trends driving the sector’s growth.

Reshoring, the practice of bringing manufacturing back to the United States, has been instrumental in the country’s manufacturing renaissance. This shift has not only revitalized domestic production but has also spurred substantial capital investment in the construction of new manufacturing facilities, particularly in North Carolina and here at home in Sanford. Several factors are converging to drive this manufacturing boom, including challenges in global supply chains, geopolitical tensions, fluctuating energy costs, proximity to consumers, federal legislation and funding, and the rise of emerging markets.

The impact of the COVID-19 pandemic played a pivotal role in accelerating the reshoring trend. The pandemic exposed vulnerabilities in international supply chains, prompting companies to rethink their reliance on distant suppliers. Disruptions in the production and transportation of critical goods underscored the advantages of having manufacturing operations closer to home, driving companies to restore production within the United States.

Several emerging markets are contributing to the reshoring trend:

  • Semiconductors
  • Electric Vehicles
  • Advanced Manufacturing
  • Data Centers
  • Life Sciences
  • Energy

Manufacturing in North Carolina and the United States offers several advantages, including political stability, reliable power supply, a highly skilled and adaptable workforce, and proximity to consumers, reducing shipping costs and times. Federal legislation and funding, such as the Chips Act and the Infrastructure Reinvestment Act, provide grants, tax incentives, and financial support to companies bringing production back to the United States, further encouraging capital investment in new manufacturing facilities.

Automation is also on the rise in the United States, leveling the playing field by eliminating the strategic advantage of cheap labor held by international competitors. Industries reliant on cheap labor will face disruption from robotic automation, leading to a resurgence in US manufacturing, and North Carolina will benefit.

Additionally, federal funding programs with Buy America clauses mandate sourcing materials from the US or completing final assembly in the US, further driving reshoring and investment in the states.

North Carolina has emerged as a prime beneficiary of this manufacturing resurgence, and we have seen projects across all the markets listed above. North Carolina and Sanford, Lee County, offer numerous economic advantages for manufacturers, including business-friendly environments, skilled workforces, robust training programs, infrastructure development, proximity to major markets, and financial incentives like tax credits and grants.

The reshoring trend is poised to continue driving capital investment in North Carolina and Sanford, Lee County. Our proactive economic development organizations, effective workforce development programs, robust infrastructure, access to reliable energy, and proximity to consumer markets contribute to our economic growth and resilience amid global economic challenges. The Sanford Area Growth Alliance continues working hard to attract new industries and grow our existing ones.

Todd Tucker

Economic Development Director