Reshoring Momentum Slows as Firms Pause to Reassess 

Reshoring has become a strategic buzz-phrase among leadership teams, but the latest data suggest the momentum is stalling. While many firms still declare intent to bring manufacturing home, the execution environment — ranging from labor cost inflation to infrastructure gaps and global sourcing dynamics — is proving more complex. For executive teams, this means that reshoring cannot simply be treated as a headline goal; it requires disciplined operational design, ecosystem alignment and realistic timing to deliver margin, risk and growth outcomes. 

In effect, the question is shifting: not should we reshore, but when and how — and can we do so at competitive cost and scale? Firms that view reshoring through the lens of risk, resilience and strategic optionality, rather than alone as a nationalist mandate, will be best positioned. The excerpt below highlights key findings from the report.

As reported in “Reshoring Sees Downturn” on Material Handling & Logistics: 

“This year, we saw a downturn—proof that positive thinking is less effective as a market driver than the basic law of supply and demand—forcing us to confront a hard truth," the report said. "While CEOs are more committed than ever to reshoring, the domestic manufacturing ecosystem is still playing catch-up, so the next phase will require not just capital, but coordination." 

Here is an analysis from the report as to why reshoring has slowed down. 

The manufacturing import ratio reversed course, as imports from 14 Asian LCCRs grew faster than US domestic manufacturing gross output—leading the Reshoring Index to decline by a staggering 311 basis points. 

US manufacturing output expanded by just 1%, despite continued capital investment in recent years. This modest growth, half the rate of the US market’s manufactured goods consumption increase, reflects the longer-than-expected lag between investment announcements and operational capacity coming online. 

Nearshoring partners also struggled to keep pace: US imports growth from Mexico trailed the boom of the previous two years. Mexico’s infrastructure—particularly roads, energy, and water—remains a persistent challenge, with several states struggling to provide enough electricity. Its workforce remains competitive, but that advantage is becoming harder to sustain as, driven in part by policy changes, labor costs increased by 4% annually, totaling a 14% increase since 2020. 

Canada recorded a year-over-year contraction of 3% in its exports to the US, in large part due to the similarity of the two nations’ manufacturing ecosystems. Labor and other production costs do not differ enough to provide Canada with a decisive competitive advantage. 

Filling in the gap between supply and demand, imports from Asian low-cost countries and regions (LCCRs), including China, increased by $90 billion (10%), led by categories such as computer and electronics and electrical equipment.” 

Continue reading “Reshoring Sees Downturn” on Material Handling & Logistics. 

Why It Matters to You 

For CEOs, COOs and other senior leaders overseeing manufacturing, supply chain or global operations, the pause in reshoring growth is a signal worth heeding. Instead of assuming momentum, leadership must reassess capital commitments, timing assumptions and ecosystem readiness — labor, infrastructure and supply chain. The key decision is not whether to reshore, but how and when you do so in a way that protects margins and enhances resilience. 

From a strategic perspective, companies that treat reshoring as a marketing headline risk falling behind firms that embed it into their broader operational strategy. The firms that win will treat reshoring not as a short-term sprint but as a structural vector of competitiveness: combining labor, location, supply resilience and investment timing in a unified plan. 

Next Steps 

• CEO/Strategy Lead: Re-evaluate your reshoring project portfolio. Score each initiative on readiness (workforce, infrastructure, supply chain) and push “go-now” items forward while deferring calibration-phase ones. 
• COO/Manufacturing Lead: Conduct a gap analysis of your domestic manufacturing ecosystem: labor cost trends, infrastructure bottlenecks, partner-supplier density. Develop improvement plans covering the next 12-18 months. 
• CFO/Finance: Model baseline versus stretched scenarios for reshoring ROI, including labor inflation, import-cost drift and funding delays; update capital allocation accordingly. 
• Supply Chain/Procurement: Re-map import exposure from Asian low-cost countries and near-shoring hubs; identify higher-risk SKUs and build alternate sourcing or inventory buffers. 
• CHRO/Talent & Workforce Lead: Launch a talent-ecosystem readiness audit: manufacturing skills pipeline, automation complementarity, labor-cost trends; link progress to reshoring milestone triggers.