This is What a Revitalized U.S. Manufacturing Sector Looks Like

Not too long ago, U.S. companies were quick to hightail it offshore to manufacture for numerous reasons, from a larger, cheaper labor pool to fewer government regulations, lower taxes, more resources of one kind or another and other reasons.

Fast forward, and a change is afoot as companies bring back their manufacturing to this country’s shores and foreign manufacturers eye possibilities in U.S. sites. GlobeSt.com has reported on this trend of reshoring beginning to happen more.

Several reasons account for the shift, according to Colliers: rising labor costs overseas, improved automation technology here and better domestic supply chain resilience. 

Two emerging markets warrant a deeper dive look at how and why this trend occurs: Austin and Charlotte. Both cities offer a robust infrastructure, skilled labor pool and attractive business climate for manufacturers to set up shop. Their success is likely to be replicated by others. 

Austin

This Texas city has been gaining population due to its vibrant manufacturing scene. Which companies have gravitated there? Tesla established its new “GigaTexas” automotive manufacturing facility and Samsung has a semiconductor factory. 

However, the city is not seeing a massive influx of true reshoring operations but has a strong manufacturing base that is growing exponentially, according to Travis Hicks, a Senior Vice President with Colliers | Austin. 

What’s driving it is a number of factors such as semiconductors, computer electronics, biotech, food & beverage and now Tesla’s new automotive operations.

The Tesla Gigafactory consists of a sprawling factory manufacturing the company’s electric vehicles and batteries. It’s located conveniently near the city’s Bergstrom International Airport and now produces the model Y and will begin production on the Cybertruck. 

In a domino effect, other suppliers and manufacturers have located in the Austin area. Also, Tesla leased more space—almost 1 million in an industrial park. 

Samsung is adding to the growing manufacturing scene, having announced plans to build a $17 billion semiconductor chip fabrication plant in an area northeast of downtown Austin. This facility will cover 6 million square feet and should be ready to hum next year and offer “significant opportunities” the report said to support companies and suppliers in the region.

Charlotte

This North Carolina city is seeing similar but different results with Grant Miller, Senior Vice President at Colliers | Charlotte, noting a change in project types compared to a year ago, namely from distribution and warehouse projects to manufacturing. He said, “It used to be real estate, labor, and electricity. The search criteria now prioritize electricity, labor and then real estate.”

As an example, one Canadian-based energy services provider manufacturer sought a suitable space for heavy manufacturing operations. Miller and other members of Colliers’ Charlotte industrial team initiated a multistate site selection search in the Southeast where there would be labor and sites with large electrical capacity.

Time was critical to meet the tenant’s need for electrical capacity, water availability and sewer capacity. The project took 24 months to complete but demonstrated the city’s ability and willingness to support manufacturers and expedite a foreign company’s entry into the U.S.