INSIGHTS

On July 28, 2025

A Decade in the Making, the U.S. Manufacturing Renaissance is Accelerating

- Terry Gardner, Portfolio Manager, C.J. Lawrence, a division of Apollon – 7/22/25

In 2013, our team observed the green shoots of what has evolved into an industrial renaissance in the United States. Our American Renaissance theme took root at that time and has deepened over the past decade. The fertilizer that initially nourished those green shoots was the widespread adoption of hydraulic fracturing, which lowered domestic energy costs, helping the country earn the title of the world's largest natural gas producer. Our colleague at the time, leading economist Nancy Lazar, was quoted in a 2013 Barron's article, saying, "The U.S. is the Saudi Arabia of natural gas." Since then, low-cost energy and improving U.S. manufacturing economics have driven a resurgence in U.S. manufacturing and the ecosystem that surrounds it, as global manufacturers seek to locate operations within the largest and most attractive consumer market in the world. 

The United States is home to the world's largest consumer economy, accounting for nearly 30% of global consumer spending, or approximately $20 trillion per year. According to the World Bank, on a per capita basis, U.S. consumers outspend the second largest per capita consumers (Australia) by over 30%. U.S. demographic trends suggest that consumption will remain robust but that the country also has an adequate supply of skilled labor necessary for continued economic expansion. The U.S. Census Bureau calculates that 27% of the U.S. population falls within the age range of 25 to 40, a high percentage compared to other Organization for Economic Co-operation and Development (OECD) countries and a prime demographic for labor, career development, family formation, and increased consumer activity. Based on current demographic trends, the U.S. is likely to remain an attractive consumer market for decades to come.  

Access to the U.S. market is a high priority for global goods producers. However, beginning in the 1970s, production capacity shifted offshore as manufacturers sought low-cost labor jurisdictions in which to manufacture goods. In recent years, however, technological advancements, hydraulic fracturing, and improvements in U.S. labor economics have altered the calculus for logistics managers and site selectors, reversing outsourcing trends.

An important driver of the shift to onshoring and reshoring has been the rapid adoption of automation, artificial intelligence, and advanced manufacturing techniques. Robotics, 3D printing, and data-driven production processes have made manufacturing more cost-effective, allowing companies to remain competitive domestically rather than relying on foreign supply chains. A 2022 report by Forrester Research found that companies that implement automation can reduce their operating costs by 25-50%. In practice, U.S. manufacturers are utilizing digital twin technology to simulate and optimize production processes, thereby reducing the need for physical prototypes. The use of digital twins accelerates the pace of new product development, production, and distribution while also lowering costs. 

Finally, as we mentioned, U.S. manufactures are increasingly using co-bots and are accelerating adoption and utilization of robots and automation.  The rate of adoption for co-bots in manufacturing just two years ago was about 8%, representing 8% growth from the prior year. That growth rate is now up to about 30%. Increased utilization of co-bots and robots is closing the labor cost gap between the U.S. and other manufacturing countries. 

While labor cost comparisons are a focal point for corporate decision-makers, energy cost comparisons play a similar role. Since the proliferation of hydraulic fracturing and the build-out of pipeline capacity, access to low-cost energy has become a competitive advantage for U.S. producers.   A recent study conducted by BLS and Co., a consulting firm specializing in location economics, revealed that median electricity prices for industrial loads in the U.S. are typically 34% to 49% lower than those in China for the same base load. For energy-intensive industries, where energy costs can range from 15% to 30% (varies by industry) of total production costs, this comparison can tip the balance in favor of U.S. production.  

More recently, the global pandemic, trade and tariff disputes, and national security concerns have prompted U.S. corporate managers to reassess their global supply chains and consider relocating productive capacity within the U.S. The same is true of foreign manufacturers who sell into the U.S. market. Over the past ten years, the United States has been the world's largest recipient of Foreign Direct Investment (FDI), according to data from the U.S. Federal Reserve. The resulting onshoring, reshoring, and investment have been a boon to the manufacturing sector's supporting ecosystem.

Complementing onshoring and reshoring-related economic growth is a capital spending super cycle in data centers and energy infrastructure that is in its infancy. Surging energy demand is being driven by advances in, and increased adoption of, energy-intensive artificial intelligence applications and quantum computing. Existing U.S. electricity infrastructure is woefully inadequate to meet accelerating consumption requirements, and the related capital spending cycle is expected to last decades. A report from Goldman Sachs suggests that over $2.9 trillion will be spent on U.S. energy infrastructure between 2025 and 2032. Meanwhile, the U.S. Department of Energy states that data centers consumed approximately 176 terawatt-hours (TWh) in 2023. Their new projections estimate that data center consumption could rise to between 325 and 580 TWh by 2028, potentially accounting for 6.7% to 12% of total U.S. electricity consumption.

The software, hardware, and raw materials required to construct and operate the new infrastructure are part of the growing ecosystem of the U.S. manufacturing renaissance. The banks that finance the projects, the consumers who provide labor and end markets, as well as the providers who deliver expertise and functional services all support the manufacturing ecosystem flywheel that will likely fuel the American Industrial Renaissance theme for the next decade.  

CRN: 2025-0710-12713 R

The opinions and views of this commentary are that of C.J. Lawrence and are not necessarily that of Advisors Asset Management.

This commentary is for informational purposes only. All investments are subject to risk and past performance is no guarantee of future results. Please see the Disclosures webpage for additional risk information at commentary-disclosures. For additional commentary or financial resources, please visit www.aamlive.com.

CJ Lawrence a division of Apollon Wealth Management, LLC (“Apollon”). Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph, or marketing piece to make decisions. The information contained in this article is intended for informational purposes only, is not a recommendation to buy or sell any security and should not be considered investment advice. Market performance information and projections have been provided by third-party sources and, although believed to be reliable, have not been independently verified and its accuracy or completeness cannot be guaranteed. Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as on the date of this video and are subject to change. Past performance is no guarantee of future performance. Please contact your financial advisor with questions about your specific needs and circumstances.