Read our full analysis for a more in-depth look at these trends.
Manufacturing: Is it time to come home?
Reshoring could bring on a manufacturing renaissance, but the costs of tariffs and labor issues risk deterring the process.
June 2025
Key takeaways
- Evidence of a manufacturing slowdown has risen in recent months. In fact, the Institute of Supply Management's Purchasing Managers' Index has entered contractionary territory and Bank of America small business account data suggests deposit volume growth has slowed, though it remains positive at 2.6% year-over-year (YoY) in May.
- Could reshoring revive part of the sector if tariffs make it more cost-effective? Half of respondents to a BofA Global Research proprietary survey expect industrials/manufacturing to record the greatest shift to the U.S. relative to other sectors over the shortest horizon (within a year).
- But many factors could limit this shift. First, tariffs could mean lower margins. Bank of America small business account data shows profitability for small manufacturing firms lags other industries and fell 2.1% YoY in May. Plus, a lack of qualified labor and high labor costs might accelerate automation, improving productivity but not necessarily employment.
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