Machine Shops NAICS 332710

Jun 18, 2025 - Rise in Reshoring and FDI

• As suppliers to US manufacturers, machine shops benefit from new manufacturing activity created by reshoring and foreign direct investment. Last year, the US manufacturing sector generated 244,000 new jobs as a result of reshoring and FDI activity, according to the Reshoring Initiative’s 2024 Annual Report. The report found that reshoring by US-based businesses exceeded foreign direct investment by the largest margin recorded to date in 2024. The vast majority of new jobs (90%) created by reshoring belong to high- or medium-tech manufacturing sectors, while low-tech industrial jobs remain “under-reshored,” per the report. Industries leading reshoring activity in 2024 were computer and electronics, electrical equipment (including EV batteries and solar), and transportation equipment, with Texas, South Carolina, and Mississippi the top states for reshored operations. Tariffs are rising as motivation for reshoring decisions – up by 454% in 2025 over 2024 – the Reshoring Initiative reports.
• While President Trump promises tariffs will be a boon for American manufacturing, in the short term, at least, tariffs are making life harder for US manufacturers, the National Association of Manufacturers reports. The president of Ohio-based copper wire products maker Republic Wire told the Cincinnati Enquirer that while he understands what the administration is trying to achieve with tariffs, “Higher prices on materials could mean fewer construction projects, which could mean a slowdown for the industry, fewer jobs and a drag on the economy as a whole.” Chuck Daras, president and COO of Michigan automotive manufacturing firm AlphaUSA, wrote in an op-ed “The truth [about tariffs] is that the burden falls squarely on American manufacturers and, ultimately, the American consumer,” adding “If the tariffs remain in place long term, small manufacturers might not be able to hold out long enough to see their promised benefit.”

• Artificial Intelligence offers numerous ways for machine shops to optimize equipment performance and longevity, and set maintenance schedules, American Machinist reports. Shops can apply machine learning (ML) algorithms to production processes to spot and overcome bottlenecks and increase output. AI-based tools can also identify which jobs customers request most, giving managers insight into the shops’ top revenue generators. AI’s ability to digest and analyze massive amounts of data from machine condition reports reveals patterns humans might miss, empowering managers to address problems before equipment malfunctions become more expensive or time-consuming, per AM. For example, a ML algorithm may detect that the cutting tools on a machine are wearing down faster than usual. Insights provided by AI can reveal whether the problem is due to the equipment or its operator. While hard data on adoption of AI by US machine shops is limited, the benefits are not.
• A bipartisan group in Congress introduced legislation in May that would boost manufacturing by small US firms, Barron’s reports. As part of the Trump administration’s efforts to revive US manufacturing and create jobs, the Made in America Manufacturing Finance Act would raise the $5 million cap on Small Business Administration 7(a) and 504 loans to $10 million, but only for manufacturers. (The current $5 million limit hasn’t changed since 2010.) The 7(a) program offers flexible financing for working capital, equipment, and real estate, while the 504 program is typically used for fixed assets like land and large machinery. The 7(a) loan program, which guarantees loans issued by banks and nonbank lenders, has long been a cornerstone of small business financing. Lenders broadly support the bill, but would like to see it applied to all small business loans, according to Forbes.