Ford Motor, which has been struggling with pandemic supply chain issues, is working to manufacture its own batteries, including in America. “In the medium to long term, securing raw materials, processing, precursors and refinement and setting up battery production here in the United States and around the world is a big task for us,” said Jim Farley, general manager of the company. call for results last week.
Companies are also starting to face price pressure from the true cost of carbon emissions from shipping parts, which could prompt them to move factories closer to consumers.
Scott N. Paul, president of the Alliance for American Manufacturing, said economic and political risks as well as carbon cost calculations are encouraging companies to gradually move their manufacturing closer to the United States.
“I only see this trend accelerating,” he said.
Long-term demographic shifts could also compound the effects of a slowdown or reverse in globalization, driving up prices by making labor more expensive. By 2050, one in six people in the world will be over the age of 65, according to United Nations estimates, up from one in 11 in 2019.
This aging means that after decades in which a new global pool of labor has made employees cheap and easy to find, recent global labor shortages may last. This could drive up wages, and businesses could pass high labor costs on to customers by raising prices.
“The demographics and reversal of globalization mean that much of it is likely to be permanent – clearly not all of it,” said Charles Goodhart, professor emeritus at the London School of Economics, of the price and labor issues in the pandemic era. Mr Goodhart co-authored a book in 2020 claiming the world was on the cusp of a demographic reversal.
“There will be structural forces that will raise inflation for probably the next two to three decades,” he said.