Hollywood Plans "Film Production Reshoring"! US Economic "Soft Landing" Welcomes a $249.1 Billion Film Incentive Blueprint

Zhitong Finance APP reports that recent economic data indicates the US economy is still expanding actively, with employment data retaining the possibility of a “soft landing” for the US economy that both President Donald Trump and the Federal Reserve desire, with real GDP growing at an annualized rate of 1.5% quarter-on-quarter in the second quarter of 2026. In August, non-farm payrolls increased by 162,000 and the unemployment rate remained at 4.1%. These data show that the economy remains resilient; however, a single month of improvement in employment is not enough to establish a sustained strong trend: revised non-farm payrolls for June and July increased by just 31,000 and 21,000, respectively. This is why some economists believe it is too early to declare the soft landing process complete.

Against this backdrop, the motion picture incentive proposal or plan put forward by the Motion Picture Association of America aims to attract production activity back to the US, thereby increasing employment and income in certain industries and their supply chains. This move may boost the US economy by $249 billion, further strengthening expectations for the US “soft landing” trajectory.

Will $249.1 Billion Propel the US Soft Landing?

Consumer spending remains a crucial pillar of the US economy, accounting for about 70% of GDP, specifically 68.0% in the second quarter of 2026. Current US consumer spending growth is still highly resilient; in July, real disposable income increased by 0.4% month-on-month, while real personal consumption expenditure was essentially flat. During the same period, headline and core personal consumption expenditure price indices rose by 3.7% and 3.3% year-on-year, respectively. Therefore, income growth can still support purchasing power, but the persistence of easing inflation and consumer momentum requires further observation.

If film and television projects generate new jobs, equipment rentals, accommodations, and catering procurement, they could support local consumption through labor income and supplier revenues, which illustrates the direct connection between industry incentives and a consumption-driven economy.

The report, “Economic Impact of Proposed Federal Film and Television Production Incentives in the United States,” commissioned by the Motion Picture Association (MPA) and conducted by consulting firm Olsberg SPI, aims to comprehensively assess the economic impact of the proposed federal film and television production tax credits. The study compares scenarios of “implementing incentives” versus “not implementing incentives” and, assuming tax preferences attract more production activities to the US, measures how new production spending drives supplier businesses, employment, and labor income, in turn stimulating further consumption. This demonstrates the concrete correlation between film and television incentives, jobs, and consumption.

The transmission logic of this study uses tax credits to change the cost comparison of production locations and then measures the impact of additional expenditure along the supply chain. The original report assumes a 20% transferable tax credit, qualifying expenditure restricted to labor costs for US residents, with additional incentives set; this helps explain why the industry sees it as a tool to compete for projects with the UK and Australia. The study estimates that from 2027 to 2035, this could increase production spending by $125.3 billion and, through direct production activities, supplier business, and labor income re-spending, generate a cumulative added value of $249.1 billion, including $133.1 billion in labor income. The research further clarifies that 143,500 jobs refer to the average annual creation and support of full-time equivalent jobs.

The $249.1 billion covers a nine-year period from 2027 to 2035, averaging about $27.68 billion per year, and this average does not mean each year’s contribution is the same as assumed in the study. For reference, the annualized nominal GDP in the US for Q2 2026 is as high as $32.49 trillion. In addition, the study assumes the US share of covered global production spending rises to 65%, so the final outcome for the US economy depends on whether the returning production meets the proactively set scale and whether its effects spread to a broader range of the economy. This forecast report demonstrates the potential contribution of industry expansion but does not calculate the probability of a US soft landing nor can it be used to prove that a soft landing has already been achieved.

Hollywood Plots Film and TV Production Reshoring

This research report, supported by major Hollywood studios, claims that film and television incentives could bring a $249 billion boost to the US economy.

However, as mentioned above, the actual macroeconomic effect still depends on the relationship between new activities and fiscal costs. An assessment by the California Legislative Analyst’s Office of the state-level film and television credit found that incentives can attract production projects, but there are mitigating factors such as reduced tax revenues, opportunity costs, and resource substitution, which separate expanding the film/TV industry from increasing the net benefit to the broader economy.

State-level conclusions cannot be directly substituted for evaluations of federal plans. For investors, visible evidence of production reshoring includes US production orders, studio and equipment usage rates, and actual costs and cash flows for production companies after tax credits. Only when policies are implemented and translated into new business can related companies’ profitability impact be verified. Achieving a nationwide economic soft landing still requires sustained job growth, real consumption, and inflation data.

Overall, the latest study commissioned by the Motion Picture Association shows that federal incentives for film and television production could contribute $249.1 billion to the US economy and add 143,500 full-time jobs by 2035.

The Motion Picture Association, representing major studios including The Walt Disney Company and Netflix, has long collaborated with Hollywood unions to promote nationwide incentives to better compete with markets like the UK and Australia, whose share of global film and television production is growing due to generous tax rebates and favorable exchange rates.

Charlie Rivkin, CEO of the Motion Picture Association, said in a statement, “Federal incentives will transform the landscape of our industry.”

The industry group, unions, and actor Jon Voight have been advocating for the Film, Television and Entertainment Industry Revitalization Act, which would establish federal tax credits for film and television production. Voight was appointed last year as one of President Donald Trump’s Hollywood envoys. Earlier this month, Trump announced his support for the initiative and stated in a social media post that it would help “bring this once-great industry back to America.”

This study was jointly conducted by consulting firm Olsberg SPI and is supported by groups including the Motion Picture Association. It found that federal incentives would generate a total of $133.1 billion in new labor income between 2027 and 2035, along with $125.3 billion in additional production expenditure over the same period.

The study is based on a 20% transferable tax credit, with additional incentives for independent films and productions shot in areas affected by natural disasters.

Other studies, including those by the Mackinac Center for Public Policy, Tax Foundation, Mercatus Center, and the Georgia Department of Audits and Accounts, have concluded that state incentive measures are not cost-effective or fail to generate lasting employment effects.