Do reshoring and nearshoring drive reindustrialization? The case of Germany

This study investigates the evolution of the German manufacturing sector in response to recent global disruptions, such as COVID-19. Using a new multi-country input–output framework, we analyze whether reshoring (bringing production back to Germany) and nearshoring (relocating it to neighboring European countries) have contributed to a process of reindustrialization. Our results indicate a clear shift in manufacturing value chains, particularly in medium-high-tech sectors, toward domestic and regional production. These sectors have increased employment within Germany and the EU while reducing dependence on distant (non-EU) production, suggesting a growing preference for resilient and regionally integrated supply chains. Concomitantly, the integration of services, particularly knowledge-intensive business services, has reinforced this transformation by supporting innovation and operational efficiency, reflecting the ongoing transformation to a knowledge-based economy. This study provides new insights into the changing geography of manufacturing and highlights the importance of reshoring and nearshoring as strategic responses to global uncertainty.