Reshoring Is Accelerating — But Finding Workers Is Still a Problem

More manufacturers are bringing production back to the United States. A new Reshoring Initiative survey found that 36% of OEMs have reshored or are actively working on additional reshoring projects in 2026, up from 29% last year.

The activity appears to be showing up further down the supply chain, too. Nearly one-third of contract manufacturers surveyed said they're currently quoting reshoring projects — roughly double last year's percentage. And manufacturers appear ready to put money behind the trend: 63% of OEM respondents said they plan U.S. capital expenditures in 2026 or 2027 related to reshoring or other domestic expansion.

But bringing manufacturing back isn't as simple as putting up a building and ordering equipment. Manufacturers continue to struggle with shortages of skilled workers, while policy uncertainty, pricing and other operating challenges complicate investment decisions.

WHY IT MATTERS

Reshoring is moving from a talking point toward actual projects, purchase orders and capital spending. That's good news for domestic manufacturers and suppliers. The bigger question may be whether the U.S. has enough skilled workers — and enough productivity — to support the opportunity.

🏭 What Rising Costs Look Like Inside a 50-Person Minnesota Manufacturer

Sometimes the best way to understand what's happening in manufacturing isn't through a national economic statistic. It's by looking inside one factory.

Straub Design, a New Hope, Minnesota industrial-machine manufacturer with roughly 50 employees, has been dealing with rising costs across its business — from fuel and supplies to health insurance. The company ultimately laid off five employees.

At the same time, some of Straub's manufacturing customers have delayed capital-equipment purchases amid uncertainty, creating pressure on the revenue side of the business as costs rise. There's an interesting twist. Straub builds automation equipment for other manufacturers, but additional automation inside its own operation previously didn't always make financial sense. As labor and operating expenses rise, management is looking at that equation again.

Straub is also consolidating suppliers to gain purchasing leverage and looking for other ways to reduce expenses.

WHY IT MATTERS

This is what manufacturing economics looks like on the ground. Automation doesn't necessarily need to suddenly become cheap for adoption to accelerate. If labor and operating costs keep rising, the cost of not automating rises too — and investments that didn't pencil a few years ago can start making sense.

Read the full story at Minnesota Star Tribune →

🤖 $30 Million+ Is Going Toward Helping Smaller Manufacturers Adopt AI and Automation

The federal government is putting more money behind a challenge nearly every smaller manufacturer is thinking about: how to actually implement advanced technology. The National Institute of Standards and Technology awarded more than $30 million to 12 Manufacturing Extension Partnership centers across 11 states and Puerto Rico.

The objective is specifically geared toward helping small and midsized manufacturers adopt technologies including AI, robotics, automation and additive manufacturing. For a smaller manufacturer, the challenge usually isn't hearing about AI or robotics. It's figuring out which technology can solve a real production problem, whether the investment will pay for itself, and how to implement it without disrupting the operation.

The MEP network is designed to help bridge that gap, with nearly 1,400 manufacturing advisers operating through more than 450 service locations around the country.

WHY IT MATTERS

The technology available to manufacturers is advancing quickly, but smaller companies don't have the engineering teams or capital budgets of the largest manufacturers. Programs that help SMBs identify and deploy practical automation could help close that gap.

Read the full story at National Institute of Standards and Technology →

🏭 Some Companies Left China to Avoid Tariffs. Now They're Going Back

For years, manufacturers have been working to diversify their supply chains away from China. But there's a wrinkle: China can be incredibly difficult to replace. Reuters reports that some companies that moved production elsewhere are now shifting at least some of it back.

The reason isn't simply labor cost. Manufacturing ecosystems matter. China has spent decades building dense networks of suppliers, experienced factory workers, infrastructure, logistics capabilities and production know-how. Companies moving into countries such as Vietnam or India can discover that a cheaper hourly wage doesn't necessarily translate into a cheaper finished product.

Production inefficiencies, logistics, supplier availability and infrastructure can eat away at the savings. That doesn't mean supply-chain diversification is over. Companies continue investing throughout Southeast Asia and elsewhere. But it does show why supply-chain decisions are becoming more complicated than simply asking which country has the lowest tariff or cheapest labor.

WHY IT MATTERS

Manufacturers learned during COVID that concentrating production in one country carries risk. Now they're learning the opposite lesson: duplicating a mature manufacturing ecosystem somewhere else isn't easy either. The next phase of supply-chain strategy may be less about finding the single cheapest location and more about building resilient networks across several locations.

Read the full story at Reuters →

⚡ Hitachi Energy Is Building a $528 Million Transformer Factory in Mississippi

The demand for electricity is creating another major U.S. manufacturing investment. Hitachi Energy announced plans to invest $528 million in a new transformer manufacturing facility in Mississippi, representing the company's largest single U.S. manufacturing investment to date.

Transformers are critical pieces of the electrical grid, and demand for electrical infrastructure has been climbing as utilities modernize aging systems and the country adds new sources of power demand. Factories are part of that demand. So are electric vehicles and electrification. And increasingly, so are massive data centers supporting AI and cloud computing.

The result is an enormous need for the equipment required to move and distribute electricity. Hitachi Energy's new facility is designed to expand domestic transformer-production capacity as that demand grows.

WHY IT MATTERS

Some of the biggest manufacturing opportunities of the next decade may come from the infrastructure needed to support everything else we're building. Transformers aren't flashy, but without them, new factories, data centers and power-generation projects don't get very far.

Read the full story at Reuters →

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