Reshoring, Onshoring, Nearshoring

Reshoring, Onshoring, Nearshoring

LEARN / REINDUSTRIALIZATION

Reshoring, Onshoring, Nearshoring

Three terms describe where production sits. None of them describes how much of it exists. The distinction matters because the figures most often cited as evidence of industrial recovery count announcements of the first kind, not additions of the second.

Key points

The four terms

Reshoring returns production that had previously moved abroad back to the home country. The word implies a prior departure, which is why it is the term most often paired with arguments about industrial decline.

Onshoring sites production domestically without implying that it ever left. New capacity built by a foreign firm entering the American market is onshoring, and much of what gets reported as reshoring is properly this.

Nearshoring moves production closer to the destination market without bringing it home, typically to Mexico or Central America for American demand. It shortens the supply line and leaves the capacity outside the country.

Reindustrialization describes an expansion of total productive capacity and the systems that support it. A country can reshore extensively and reindustrialize very little, if what returns is assembly work fed by imported components.

Why the distinction has consequences

Consider a firm that closes an assembly plant in Asia and opens one in Tennessee. The product is now finished in the United States, and every announcement will describe the move as reshoring. If the castings still arrive from one country, the electronics from another, and the tooling from a third, then American productive capacity has increased by the value of assembly labor and very little else. The vulnerability that motivated the move survives it, one tier down and out of sight.

The reverse case is equally common and attracts no coverage. A domestic firm in an industry that never left expands a plant, qualifies a second source for a critical input, and adds a heat-treating line it previously subcontracted. Nothing has been reshored. Productive capacity has genuinely increased, and the depth of the supply chain has improved in a way that no reshoring count records.

How reshoring is counted

The most widely cited American reshoring figures come from the Reshoring Initiative, a private organization that has maintained a case database since 2010. Its 2024 annual report records 244,000 manufacturing jobs announced through reshoring and foreign direct investment during that year, and more than two million announced cumulatively since 2010.

Measurement noteThe Reshoring Initiative states its own methodology plainly: “Job numbers are based on company announcements of current, recent, or future hiring. Actual hiring typically lags announcements by 12 to 24 months.” The series counts intentions with a stated lag, which is a legitimate construction and a different quantity from employment.

Set that against the federal employment series. The Bureau of Labor Statistics reported manufacturing payroll employment of 12,611,000 in July 2026. The two figures cannot be combined, because one counts gross announcements of future hiring and the other measures a net stock after every closure, layoff and retirement in the same period. A year in which 244,000 jobs are announced and 250,000 are lost elsewhere produces a rising announcement count and a falling employment level, and both numbers are correct.

Institute analysisAnnouncement series and stock series answer different questions and should never be presented as though one confirms the other. The useful test for any reshoring figure is whether it survives contact with the employment level. Where cumulative announcements substantially exceed the change in the stock, the gap is doing analytical work that the citation is not acknowledging.

Common misconceptions

That an announced factory is added capacity. Announcements precede construction, construction precedes qualification, and qualification precedes production at rate. Each stage has a failure mode, and the announcement is the only one that generates coverage.

That foreign direct investment is reshoring. A foreign manufacturer building an American plant is onshoring capacity that was never American. Most published reshoring totals combine both categories, which is defensible when disclosed and misleading when the combined figure is described as work returning.

That nearshoring reduces exposure. Moving production from Asia to Mexico shortens transit and changes the tariff position. Whether it reduces dependence turns on where the inputs to that Mexican plant originate, which is a question about supply chain depth rather than distance.

What the evidence says, and where it is contested

ContestedWhether announcement data predicts realized capacity is genuinely disputed. One position holds that announcements are a leading indicator with a known lag, and that the 12 to 24 month delay explains most of the apparent gap against employment. A second holds that announcement counts systematically overstate, because cancellations and downward revisions receive no comparable publicity and therefore never enter the running total. Resolving this requires tracking individual cases from announcement to operation, which no public series currently does.

Related Institute research

What Is Reindustrialization?
The capacity question these terms do not answer.

Reshoring Nitrile Gloves: America’s Cheapest Industrial Vulnerability
A single-product case study in what reshoring actually costs.

Sources

Reference entry maintained by the Institute for American Manufacturing & Technology. Figures are drawn from primary sources and cited above. Where the Institute states a position rather than a finding, it is marked as such.

Private Professional Network

Institute for American Manufacturing & Technology

Join the IAMT Network. Connect with researchers, policymakers, and industry leaders working on American manufacturing, energy, and technology policy.

Apply for Membership →