Reshoring Index 2026: U.S. Manufacturing Reshoring Momentum Continues but Faces Headwinds

The United States reshoring trend that accelerated dramatically during and after the pandemic continues to generate substantial job creation and capital investment, though the pace of growth is moderating as companies encounter practical constraints. The Reshoring Initiative, a nonprofit that tracks manufacturing job movements, reports that 364,000 manufacturing jobs were reshored or created through foreign direct investment in 2025, the fourth consecutive year above 300,000. Cumulatively, over 1.8 million manufacturing jobs have been reshored or attracted to the U.S. since 2010, with the trend accelerating markedly from 2020 onward.

The semiconductor and electric vehicle sectors continue to dominate reshoring activity by investment value. TSMC's $65 billion Arizona fab complex, Samsung's $45 billion Texas investment, and Intel's $20 billion Ohio expansion represent the largest individual commitments. In the EV space, battery manufacturing investment alone has exceeded $100 billion in announced commitments across the southeastern United States, with major facilities from Panasonic, LG Energy Solution, SK On, and Samsung SDI at various stages of construction. "The CHIPS Act and Inflation Reduction Act have been extraordinarily effective at attracting investment," said Harry Moser, founder of the Reshoring Initiative.

However, the conversion of announced investments into operational facilities is proving more challenging than anticipated. Construction cost inflation, which has averaged 7% annually in the industrial sector since 2022, has increased the capital required for new facilities by 20-30% above original estimates. Permitting and environmental review timelines remain lengthy, with the average time from announcement to production start for a major manufacturing facility now estimated at 4.5 years — compared to 2.5 years in China and 3 years in Vietnam. TSMC's Arizona facility, originally expected to begin production in 2024, is now targeting early 2027, a delay attributed to a combination of construction challenges and difficulty recruiting skilled workers.

The workforce constraint is particularly acute. States that have attracted the most reshoring investment — Arizona, Texas, Ohio, Georgia — are experiencing severe shortages of construction tradespeople, semiconductor fabrication technicians, and industrial engineers. Arizona's unemployment rate of 2.8% means that companies must recruit workers from other states, driving up labor costs and housing prices. Maricopa County, home to TSMC's fab complex, has seen average rents increase 38% since 2022, creating affordability challenges for the workers these facilities need. Some companies are responding with creative solutions: Samsung provides subsidized housing for workers at its Taylor, Texas facility, while Intel has partnered with Columbus State Community College to create a fast-track semiconductor technician program.

Despite these headwinds, the structural forces driving reshoring remain strong. Geopolitical risk premiums on Asian supply chains, rising transoceanic shipping costs, carbon border adjustment mechanisms, and customer demand for supply chain transparency all favor domestic production. A survey of 500 manufacturing executives by Kearney found that 78% plan to increase their share of U.S.-based production over the next five years. "The question is no longer whether reshoring will happen," concluded Kearney partner Patrick Van den Bossche, who publishes the annual Kearney Reshoring Index. "The question is how quickly we can build the physical infrastructure and train the workforce to absorb the investment that wants to come."