The U.S. Is Fast Becoming The New Global “Default Option” For Manufacturing [General Electric Company(NYSE:GE), Sector Spdr Trust Sbi(NYSEARCA:XLI)]

manufacturing growthAfter two decades of flying the coop, the chickens are coming home to roost. And they’re bringing friends. I’m talking about American companies that had moved their manufacturing operations offshore to China. They’re moving back: More than 200 U.S.-based companies have repatriated manufacturing production in the last four years.

Even more remarkable, foreign manufacturers are beginning to outsource their operations here. The U.S. is fast becoming the new global “default option” for manufacturing outsourcing.

It’s all part of what I call the Rust Belt Revival; I’ve written about it herehere… and here.

Short Time, Big Changes

What a difference a few decades can make.

Twenty years ago, it made perfect economic sense for American companies to manufacture goods in Asia, particularly in China. But that’s changing.

Industrial land that had been plentiful and cheap is getting scarce and expensive. One study has Chinese industrial land averaging $10.22 per square foot. That’s more than double what you’ll pay in some areas of the U.S.

Chinese labor costs, which had been a fraction of those in the U.S., are climbing too. The nation’s workers are demanding – and receiving – 15% annual wage increases. Many laborers are unwilling to work six days a week for low pay in poor working conditions.

And massive layoffs during the financial crisis of 2008 lowered labor rates in the U.S. More than 2 million American manufacturing jobs were

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