How Mid-Atlantic Contract Manufacturers Are Filling the Reshoring Gap

Elsner Engineering Works: Purpose-Built Precision Since 1934

As American manufacturers abandon offshore production at unprecedented rates, a critical question emerges: who will make the parts? As a dedicated manufacturing partner for industrial automation solutions, Elsner Engineering Works has seen the Mid-Atlantic corridor—stretching from southeastern Pennsylvania through Maryland and into Virginia—emerge as a reshoring destination that combines established manufacturing infrastructure, skilled workforce availability, and logistics advantages that distant regions cannot match. For OEMs seeking domestic contract manufacturing partners, this region offers capabilities that address both immediate production needs and long-term supply chain resilience.

Pennsylvania alone hosts more than 14,000 manufacturing firms contributing $113.2 billion to state GDP annually. The overwhelming majority—99 percent—employ fewer than 500 workers per location, making them precisely the flexible partners needed for high-quality component assembly services. These aren't massive operations optimized for million-unit runs; they are agile facilities capable of handling the high-mix, low-volume production that characterizes modern reshoring requirements.

The Infrastructure Advantage

The Mid-Atlantic's geographic position creates logistics efficiencies that translate directly to total cost of ownership advantages. The Delaware Valley Industrial Resource Center reports that Pennsylvania manufacturers export $33.1 billion in goods annually—30 percent of manufacturing GDP—demonstrating established connections to global supply chains. This export infrastructure works equally well in reverse, supporting inbound material flows for domestic production serving national markets.

Philadelphia's industrial sector delivered more than 9 million square feet of new logistics space in the first half of 2025—a nearly fourfold increase from the previous year. This surge reflects rising demand for distribution capacity in the Northeast driven by e-commerce, cold storage requirements, and manufacturers seeking regional distribution hubs. The construction boom signals sustained confidence in the region's role as a logistics nexus connecting East Coast ports to inland markets.

Understanding the broader forces driving companies toward domestic production provides essential context for these regional developments. Why U.S. Manufacturers Are Abandoning Offshore Production in 2025 examines the trade deficit realities and supply chain vulnerabilities accelerating reshoring momentum across industries.

Port access differentiates the Mid-Atlantic from inland manufacturing regions. The Port of Baltimore is undergoing major expansion, with plans for a $1 billion container terminal that would elevate Baltimore from sixth to third in East Coast container capacity. The Howard Street Tunnel project, a $293 million infrastructure investment, will enable double-stacked container trains connecting directly into CSX networks reaching Midwest markets. For contract manufacturers serving customers with imported raw materials or components, this port connectivity reduces transit times and landed costs.

Workforce Reality: Challenges and Opportunities

The workforce equation in the Mid-Atlantic reflects national manufacturing trends—tight labor markets, skills gaps, and intense competition for technical talent. Pennsylvania manufacturing employment totaled 562,700 workers as of early 2025, representing 9.5 percent of the state's workforce. Manufacturing jobs in the region pay an average of $86,129 with benefits—33 percent higher than non-manufacturing positions—creating both recruitment advantages and competitive pressure.

The Pennsylvania Manufacturing Extension Partnership's Vision 2030 strategy projects that increasing manufacturing output by 10 percent annually could generate more than 368,000 new jobs by decade's end, including 138,000 direct manufacturing positions. The strategy emphasizes that most new manufacturing jobs will not require four-year degrees, instead focusing on high school diplomas, post-secondary certificates, and associate degrees combined with apprenticeship pathways.

Significantly, 62 percent of current Pennsylvania manufacturing jobs don't require a degree, making these positions accessible to workers transitioning from other industries or entering the workforce without college credentials. For contract manufacturers serving reshoring customers, this accessibility matters—it means workforce expansion doesn't depend exclusively on competing for engineering graduates against technology companies offering remote work options.

The workforce challenge cuts both ways for reshoring decisions. Forty-five percent of Pennsylvania manufacturers report turning away work due to workforce constraints. This represents both a limitation on capacity expansion and validation that demand exists. Contract manufacturers investing in workforce development, training programs, and competitive compensation packages position themselves to capture business that competitors cannot serve.

Strategic Sectors Drawing Investment

Several industry sectors are driving particularly strong demand for Mid-Atlantic contract manufacturing capabilities. Defense manufacturing represents a significant opportunity—currently, 20 percent of the Columbia Class submarine supply chain originates in Pennsylvania, making the state a linchpin in America's security infrastructure. Contract manufacturers with appropriate security clearances and quality certifications can access defense contracts that offshore suppliers cannot touch.

The clean energy transition creates additional demand. Pennsylvania manufacturers are producing components for hydrogen hubs, natural gas facilities, solar panels, wind turbines, and energy storage systems. EOS Energy Systems in Turtle Creek received a $396 million federal loan to develop zinc-powered energy storage solutions, creating 700 jobs. CorePower Magnetics in Pittsburgh secured $20 million in Department of Energy funding to manufacture magnetic components for electric vehicles. These investments ripple through regional supply chains, creating opportunities for contract manufacturers serving as second and third-tier suppliers.

Medical device manufacturing presents another growth sector. Southeastern Pennsylvania ranks among the top 10 U.S. medical device manufacturing hubs, with particular strength in cardiovascular, orthopedic, ophthalmic, and diagnostic devices. Contract manufacturers with ISO 13485 certification and clean room capabilities find strong demand from medical OEMs seeking domestic alternatives to Asian suppliers facing increased regulatory scrutiny.

What Makes Regional Contract Manufacturers Attractive

The characteristics that define successful Mid-Atlantic contract manufacturers align precisely with what reshoring companies need. Flexibility to handle varied product types and production volumes. Quality systems meeting aerospace, medical, and defense requirements. Engineering collaboration capabilities that accelerate problem-solving. And proximity that enables same-day site visits when issues arise.

For every dollar spent in manufacturing, the economic multiplier generates $1.76 in total Pennsylvania economic impact. Every manufacturing job supports an additional 1.5 workers throughout related industries. These multipliers explain why state and local economic development organizations actively support manufacturing growth—and why contract manufacturers can often access workforce training grants, tax incentives, and technical assistance that reduce operating costs.

The regional concentration of precision manufacturing capabilities creates ecosystem effects that benefit individual companies. Suppliers of tooling, materials, and services cluster near their customers. Technical colleges develop programs aligned with employer needs. Equipment dealers maintain inventory and service capabilities for the machines their customers operate. This ecosystem density means contract manufacturers can access support resources locally rather than waiting for specialists to travel from distant locations.

For OEMs evaluating domestic contract manufacturing partnerships, understanding what distinguishes effective partners from those who struggle with the transition matters significantly. What OEMs Should Know Before Switching to Domestic Contract Manufacturing provides practical guidance on evaluating capabilities, establishing quality expectations, and structuring relationships that succeed over time.

Positioning for Continued Growth

The reshoring wave shows no signs of cresting. Cumulative reshoring and foreign direct investment announcements have exceeded two million jobs since 2010, with 2024 alone contributing more than 244,000 positions. Government incentives, tariff pressures, and supply chain risk concerns continue driving location decisions toward domestic production. Contract manufacturers  services positioned to capture this demand will grow; those lacking capacity, capabilities, or quality systems will watch opportunities flow elsewhere.

Mid-Atlantic contract manufacturers are investing accordingly. Automation technologies that extend workforce capacity. Quality certifications that open doors to regulated industries. Digital systems that provide the visibility and traceability reshoring customers expect. These investments require capital and commitment, but they position facilities to serve customers whose expectations were shaped by decades of working with sophisticated offshore suppliers.

Supply chain resiliency has become a key pillar of regional economic development strategy. By bolstering local supplier networks and encouraging lean operations, Pennsylvania aims to safeguard manufacturers against future disruptions and reduce dependency on global logistics. As a leading manufacturing partner for industrial automation solutions, Elsner Engineering Works helps local facilities bridge these gaps by providing high-precision contract manufacturing services. For regional shops, this means opportunities to participate in coordinated supply chain development rather than competing as isolated entities.

The region's manufacturing heritage provides foundation but not guarantee. Companies that thrived serving local customers for generations must adapt to serve national accounts with different requirements. Family-owned operations must professionalize management systems and quality documentation. Job shops must develop project management capabilities for turnkey production rather than simple machining services. The contract manufacturers succeeding in the reshoring environment combine traditional craftsmanship with modern operational discipline.

Elsner Engineering Works: Your Mid-Atlantic Manufacturing Partner

At Elsner Engineering Works, we've delivered precision manufacturing from our Hanover, Pennsylvania facility since 1934. Our 112,000 square foot ISO 9001:2015 certified operation provides the quality, flexibility, and regional accessibility that reshoring companies require from domestic contract manufacturing partners.

Our Services Include:

• Contract Manufacturing - Turnkey production from component assembly to complete product manufacturing with strict quality control
• Precision Machining - 5-axis CNC capabilities with tolerances to ±0.0005" supporting demanding applications

Ready to Explore Regional Contract Manufacturing? Contact Elsner Engineering Works to discuss how our Mid-Atlantic location and precision capabilities can support your reshoring requirements.

Works Cited

"Pennsylvania Manufacturers: Driving Economic Growth and Providing Quality Jobs." DVIRC, Delaware Valley Industrial Resource Center, 6 Feb. 2025, www.dvirc.org/insights/pennsylvania-manufacturers-driving-economic-growth-and-providing-quality-jobs/. Accessed 10 Dec. 2025.

"Vision 2030: Forging the Future of Manufacturing." Catalyst Connection, Pennsylvania Manufacturing Extension Partnership, Sept. 2024, www.catalystconnection.org/wp-content/uploads/2024/09/Vision-2030-Strategic-Vision-FINAL.pdf. Accessed 10 Dec. 2025.

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• Why U.S. Manufacturers Are Abandoning Offshore Production in 2025
• What OEMs Should Know Before Switching to Domestic Contract Manufacturing