Rice Subcommittee Examines Global Economic Trends On Domestic Manufacturing and Ramifications For Small Business

Press Release

The Small Business Subcommittee on Economic Growth, Tax and Capital Access, led by Chairman Tom Rice (R-SC), today held a hearing to examine the state of domestic manufacturing. In particular, the Committee analyzed the return of manufacturing activity to the United States that had largely been taking place overseas, a trend some refer to as "re-shoring," and what the potential implications of this trend mean for small businesses.

In recent years, a number of changes have occurred in the United States and overseas, that appear to be reversing the manufacturing off-shoring trend, and instead is resulting in firms returning some of their manufacturing production to the United States. Recent increases in the cost of transporting goods, currency appreciation, quality control issues, and a general rise in productivity-adjusted wages increase the cost of manufacturing overseas. These changing factors, combined with shorter supply chains that allow domestic manufacturers to respond to customer demand in days or weeks, instead of months, are providing domestic manufacturers a distinct advantage over their foreign competitors.

"In order to improve America's global competitiveness, we must reinvigorate our nation's manufacturing capacity," said Chairman Rice. "We must also not forget the importance of this industry to the small business economy. When larger businesses decide to re-shore their manufacturing to the United States, they not only create jobs in their own plants, but additional jobs in the factories and plants of their component suppliers, many of which are small businesses.

"Many companies are finding that re-shoring their manufacturing domestically allows them to enjoy benefits that are not often readily apparent or are difficult to quantify on a financial spread sheet. This is good for small business and good for America's global competitiveness. Washington must provide certainty and embrace policies that promote manufacturing growth in the United States to ensure that this re-shoring trend continues."

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