Last year Jeff Immelt, the boss of General Electric, declared that outsourcing was “mostly outdated as a business model”. GE’s venerable Appliance Park in Louisville, Kentucky, is opening a string of new assembly lines to build refrigerators, water heaters and washing machines, bringing home jobs from China and Mexico. President Barack Obama has trumpeted this wave of “insourcing”, while Hal Sirkin of the Boston Consulting Group foretells a US “manufacturing renaissance”. Even as the news from Washington reeks of heedless brinkmanship, the news from the people who actually make stuff sounds refreshingly hopeful.

How real is this renaissance? It is tempting to dismiss it out of hand. Manufacturing has experienced a steady relative decline in just about all advanced economies. Between 1980 and 2010, German manufacturing value added fell from 30 per cent of gross domestic product to 21 per cent, according to World Bank data, while Japan’s fell from 27 per cent to 19 per cent. But there are a few exceptions. After its financial crisis in 1992, Sweden boosted manufacturing value added as a share of output and held on to the gains for more than a decade.

The question is whether Sweden’s conditions exist in the US. The first requirement is a weak currency. After its peak in 1992 Sweden’s real effective exchange rate fell 27 per cent, according to the Bank for International Settlements. Since the dollar peaked in 2002, it has fallen by 21 per cent, enough to make a major difference. In 2000 US wages were almost 22 times higher than China’s. By 2015 that multiple will have declined to four.