• Morgan Stanley estimated that bringing manufacturing back to the US could add $10 trillion to the economy.

• The bank pointed to a 20-year stagnation of the industrial economy as production was sent offshore.

• Reshoring could especially benefit "high-tech" sectors, the bank said.

The US economy could unlock trillions in value over the next decade if more manufacturing activity comes back to the US, according to Morgan Stanley.

After decades of production activity being sent abroad, domestic manufacturing is starting to come back to the US, the bank said, a phenomenon known as reshoring.

If domestic production continues to scale, the economy could gain as much as $10 trillion in value over the next decade, according to Chris Snyder, a US multi-industry analyst at the bank.

"After decades of offshoring and relying on international supply chains, the pendulum is swinging back toward domestic production," Snyder said in a recent episode for Morgan Stanley's "Thoughts on the Market" podcast.

"In fact, we believe the US is entering the early innings of re-industrialization — a multi-decade opportunity that we size at $10 trillion and think has the potential to restore growth to the US industrial economy following more than 20 years of stagnation," he added.

The manufacturing sector continued to contract in September, with activity declining for the 22nd month out of the last 23, per the Institute of Supply Management.

Still, the sector is showing signs that the US is backing backing away from offshore production. The US's international trade deficit for goods and services declined to $70.4 billion in August, down $8.5 billion from the prior month, according to the Commerce Department.

The Biden administration, meanwhile, has poured billions into its push to increase chip production in the US and boost the manufacturing and industrial sectors. As of February of this year, annual investment in new manufacturing facilities hit a record $225 billion, according to a memo from the Senate Joint Economic Committee.

Shifting production back to the US is expected to be helped along by new technology, like artificial intelligence and more advanced robotics and automation, Snyder said. That could be a boon for "high-tech" sectors in the US, he later added, pointing to the semiconductor, pharmaceuticals, and advanced manufacturing systems industries.

Traditional industrial firms — like those in the auto and aerospace sectors — and companies that invest in more sustainable manufacturing are also expected to benefit from the reshoring shift, he added.