The latest prediction forecast for 2021 in the site selection world provides some good news with cautious optimism. Cautious optimism in the areas of foreign direct investment (FDI) and skilled labor recovery are producing the most chatter among consultants. This is closely followed by a challenged logistic system across the US and globally supply chains.
Although the outlook is very good for the southern states in the US, the challenge remains with decreased (or no) travel from foreign countries to the US. The interest still is high and will likely continue; however, the foreign investors need to “kick some dirt” remains. The size of the FDI projects have also increased since the onset of the pandemic, with a Site Selectors Guild member indicating the projects that were active before the pandemic are still progressing toward moving to the US – but the capital investment for most projects has increased 12% to 18%. The likelihood of projects progressing forward continues to increase as well. In April 2020, the renewed site selection activity across the Site Selectors Guild was at 47% on a great day – compared to nearly 80% in December on an average day. So, positive news!
Skilled labor recovery is still one of the highest challenges that we have in the US. The need for workers with technical degrees is likely at the highest point ever. The interest in advanced manufacturing and technology (AMT) continues to outpace other active industries falling closely behind Biotech and Life Sciences. AMT requires a skilled workforce, not a workforce with a 4-year degree but a workforce with skills in electrics, hydraulics, and pneumatics. So, the usefulness of a 4-year degree in the AMT industry is becoming less of a need. The AMT community did have a few positive months of filling needed workforce positions when there was temporary surplus of labor from other industries – mainly the hospitality industry.
A challenged logistic system was the leading cause of instability in manufacturing operations during this pandemic according to the Site Selectors Guild Panel. The import of manufacturing supply products caused an imbalance of materials for several AMT industries, either they had none or they were storing surplus in rented warehouse space – however, they would have rather had too much than not enough. The terms reshoring and nearshoring have become the new buzz words in manufacturing – where either their supply channels are located within the US or in a country that is connected to the US – Canada and Mexico are really winning this game. The overarching question of this challenged logistics supply system that has emerged even more strong is the last mile or next day delivery. The supply chain site selectors are capitalizing on the lessons learned and the rise of the e-commerce business to make their normal supply chains even stronger.
The irony of the pandemic is that the pandemic exposed vulnerabilities and pure weaknesses in the US and abroad across nearly every industry. The however in this equation is that these vulnerabilities are weaknesses that many of the industries have been working to improve for several years – now they have a huger jumpstart correcting theses weakness. Now, if we could just find the workforce to fill the needed positions. When international travel opens up, we better be ready to go kick some dirt with our FDI prospects!