U.S. manufacturing revival: trends, challenges and opportunities

Every company has different requirements, but many international companies look at North America as a whole when they begin their search for industrial real estate located closer to U.S. consumers. Mexico is growing rapidly as a manufacturing hub, but the U.S. is leading the way in clean energy production, an important factor for companies with ambitious sustainability goals.

Companies often have multiple North American countries as links in their supply chain. For example, they may manufacture some components in Mexico or Canada but perform final assembly in the U.S. Having these different nodes eliminates the risk of having a single point of failure, ultimately supporting resiliency.

A region’s desirability generally comes down to three primary factors — people, power and property — as well as the availability of state and local incentives. Labor availability plays heavily into location decisions. It’s important to analyze the area’s growth potential in addition to today’s population and workforce. Factors such as housing starts and cost of living provide clues about a geography’s ability to attract future workers.

Power costs and availability matter greatly to manufacturers with power-intensive operations, such as electric vehicle (EV) and battery companies. They’ve also got to consider the power grid’s reliability and the availability of renewable power.

Finally, property inventory also factors into a region’s attractiveness. The current scarcity of U.S. facilities with adequate infrastructure for advanced manufacturing can limit options for companies looking to gain speed to market in a second-generation facility.