COVID-19, coupled with protectionist policies by governments around the world, laid bare the downsides to sourcing from overseas. Our clients and attendees of our economic presentations frequently express interest in reshoring and foreign direct investment as ways to help shorten supply chains and avoid tariffs. But how big is this trend? As always, at ITR Economics we turn to the data.
In 2023, foreign direct investment (FDI) was up 22.6% from 2019. Further, the Reshoring Institute reported that 343k reshoring- and FDI-related jobs were created in 2022, and 287k were created in 2023. By comparison, a scant 99k such jobs were created in 2019. Simply put, understanding how your business can capitalize on these trends is a must. In our August webinar, Senior Forecaster and Presenter Connor Lokar will dive into the industries that are seeing the most upside pressure from reshoring and FDI.
In addition to understanding the data behind these trends, it will be critical to assess how they square with the other pressures facing your business. Economic uncertainty is elevated, interest rates and inflation are impacting a host of businesses, and we are in an election cycle. What should you focus on? How much weight should you place on chasing the reshoring/FDI trends versus focusing on other priorities? While every situation is unique, Connor will talk about how businesses can think about planning for the next few years from a holistic perspective.
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