Executive Summary
The CPA Reshoring Index is the first and only measure of U.S. producers’ share of the U.S. domestic market for manufactured goods. It is calculated from federal government data on manufacturing production, imports, and exports. The Reshoring Index for 2020 shows that U.S. producers had a 69.6% share of the U.S. market with importers taking 30.4% of the market. In this Working Paper, we look at recent trends in U.S. producers’ share of the total manufacturing market and key sub-sectors. We also look at the trade deficit in manufactured goods, which reached an all-time high last year of $897 billion. Since 2002, the U.S. has lost 7.7 percentage points of market share in the U.S. market. Regaining that share would add over $500 billion to manufacturers’ revenue and millions of additional jobs.
Key Takeaways
• The CRI rose slightly from 69.4 in 2019 to 69.6 in 2020, as U.S. producers took a slightly larger share of the U.S. manufacturing market. The CPA Reshoring Index (CRI) measures U.S. producers’ market share in the U.S. domestic market for manufactured goods. The improvement in the CRI reflects reductions in imports caused by the COVID shutdowns during 2020.
• The U.S. manufacturing trade deficit hit a new all-time high in 2020 of $897 billion, or 4.29% of GDP. The deficit was widespread across manufacturing. Of the 19 manufacturing sub-sectors, 16 were in deficit, including motor vehicles, computers, chemicals, and machinery.
• Since 2002, the CRI has fallen by 7.7 points, from 77.3 to 69.6, as importers have gained share across nearly every major manufacturing sector. This represents a loss of $524 billion of potential business in 2020 for U.S. producers in the U.S. manufacturing market.
• The total U.S. market for manufactured goods was worth $6.8 trillion last year. Contrary to claims that foreign markets are a priority, the huge U.S. market represents the largest opportunity for the vast majority of U.S. manufacturers. U.S. manufactured exports were just $1.17 trillion last year. Nations that cannot hold their home market do not succeed in foreign markets.
• The import penetration of China’s manufactured goods into the US market fell from a high of 7.7% in 2017 to 6.2% last year, demonstrating the success of China tariffs in making the U.S. less dependent on China. However, U.S. imports are increasing because other foreign nations are taking the place of China as a source of U.S. imports. The import penetration of the European Union, at 5.6% last year, could overtake China in the near future.
• Manufacturing output has fallen since 2002 in ten out of 19 sectors. Some of the largest declines are in apparel (-74%) and computers (-28%). The Durable Goods manufacturing sector output has declined 1.3% since 2002 despite growth of 40.3% in the U.S. economy since then. Manufacturing employment losses have been far larger than the losses in output.
