Reindustrialization strategies in Europe and the US

Table ofcontents Thank you to the many industry executiveswho participated in this study and added value Samuel ShiroffSenior Director, Global SustainabilityEnerSys Juan Manuel Santiago MendezGroup Aftermarket andSupply Chain Director, Mercedes-Benz Elisabet SvenssonHead of Technology Academy,SKF Group Jean-Christophe LambertChief Executive Officer,Ascendance Who shouldread thisreport andwhy? Who? annual revenue above $1 billion, across 13 sectorsand 11 major countries in the US and Europe andin-depth interviews with senior executivesfrom organizations within the in-scope industries. This report will speak to technology and businessleaders across functions, in particularchief executivesand strategy, operations, supply chain, andtechnology leadersin manufacturing organizations.It offers an overview of the global reindustrializationprocess that will be of specific interest to European andUS policymakers. This report draws on findings from anindustry survey of more than 1,400 senior executives(director level and above) from organizations with The global survey wasconducted during theperiod January 1–20, 2025. For more detailson the survey, please refer to the researchmethodology section at the end of the report. Why? This report is the second installment in anannual research series and offers critical insightinto the forces driving the transformativewave of reindustrialization sweeping acrossEurope and the US in 2025. We examine howreindustrialization strategies have evolved overthe past year and explore the critical role ofdigital transformation and sustainability in drivingthe next phase of industrial competitiveness. With the second Trump administration underwayin the US, shifting geopolitical alliances, tradetariff concerns, supply chain vulnerabilities, climatechange challenges, and energy security risks areall injecting urgency into the conversation aroundreindustrialization. Organizations must make crucialdecisions regarding their manufacturing, supplychains, and long-term resilience, informed by anexamination of policy, politics, and corporate strategy. •We expect onshore and nearshore manufacturingto increase in the next three years. Currently, 41% offacilities are onshore, 22% nearshore, and 37% offshore.In the next three years, onshore operations are expectedto rise to 48%, nearshore to 24%, while offshore will dropto 28%. After decades of globalization, European and USmanufacturers are embracing reindustrialization Global manufacturing is pivoting from cost-focusedoffshoring to an emphasis on local and regional resilienceand autonomy. The desire to mitigate geopolitical risks,minimize supply chain disruptions, manage economicuncertainty, navigate tariffs, enhance sovereignmanufacturing capabilities, reduce logistical coststhrough increased proximity to the customer base, andprioritize sustainability are key drivers of the resurgenceof manufacturing in Europe and the US. Executivesummary •Three-quarters (73%) believefriendshoringwillrepresent a significant proportion of their sourcingand production going forward. Moreover, the share offriendshoring within total manufacturing is expected togrow from 37% currently to 41% in the next three years. •More than eight in ten executives say their organization isreducing supply chain reliance on China. But while themove towards diversification is evident, the complexitiesinvolved in reducing reliance on Chinese manufacturingand supply chains should not be underestimated. •In 2024, 59% of executives reported having an activeor work-in-progressreindustrialization strategy.In 2025, 66% of executives say they either have acomprehensive strategy already or are developing one. •More organizations havenearshoredmanufacturingover the past year. In 2024, 42% of executives saidtheir organization invested in either nearshoring or acombination of reshoring and nearshoring. In 2025,more than half (56%) of executives say so. •Organizations have targeted reindustrializationdestinations in North America, UK, Europe, SoutheastAsia, and North Africa. Nearly six in ten (59%) executives are determined tocontinue their reindustrialization efforts despite highcosts, while only 32% foresee short-term cost pressuresdelaying their investments. Our research shows thatreindustrialization investments within and outside ofdomestic markets are projected to reach around $4.7trillion over the next three years – up from $3.4 trillion in2024.1Organizations across the US, Europe, and the UKplan to double their domestic investments over the nextthree years. Organizations are turning to diversification tomitigate the impact of trade tariffs An overwhelming 93% of executives express concernsabout rising tariffs affecting their operations and marketaccess. Over half (54%) believe that import tariffs willaccelerate their reshoring and reindustrialization efforts,with an even higher percentage (59%) among US-basedorganizations. Diversification emerges as a crucialstrategy to