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Majority of Large Manufacturers Are Now Planning or Considering ĹReshoringĺ from China to the U.S.
bcg.com ^ | September 24, 2013

Posted on 05/21/2014 10:49:57 AM PDT by ckilmer

Press Releases


CHICAGO, September 24, 2013—More than half of U.S.-based manufacturing executives at companies with sales greater than $1 billion are planning to bring back production to the U.S. from China or are actively considering it, according to a new survey by The Boston Consulting Group.

The share of executives who are planning to “reshore” or are considering it rose to 54 percent, compared with 37 percent of executives who responded to a similar BCG survey in February 2012. The new survey, conducted last month, elicited responses from more than 200 decision makers at companies across a broad range of industries. Virtually all of the companies manufacture in the U.S. and overseas and make products for both U.S. and non-U.S. consumption.

The survey also found a sharp increase in the percentage of executives who are actively engaged in the process of shifting production to the U.S. When asked whether they expect to move production in light of rising wages in China, 21 percent of respondents—around twice as many as in 2012—said they are “actively doing this” or that they “will move production to the U.S. in the next two years.”

The increase in willingness to reshore supports earlier BCG findings that are part of the firm’s Made in America, Again series, produced by its Operations and Global Advantage practices. The series explores the shifting economics of global manufacturing and how the changes are starting to favor the production of certain goods in the U.S.

In a report released in August, Behind the American Export Surge: The U.S. as One of the Developed World’s Lowest-Cost Manufacturers, BCG projected that production reshored from China and higher exports due to improved U.S. competitiveness in manufacturing could create 2.5 million to 5 million American factory and related service jobs by 2020.

“Over the past couple of years, we’ve projected an improvement in U.S. manufacturing competitiveness by 2015 that would help drive an American manufacturing revival,” said Harold L. Sirkin, a BCG senior partner and a coauthor of the study. “The results of our latest survey make clear that a profound shift in attitude is beginning.”

The top three factors cited as driving future decisions on production locations were labor costs (cited by 43 percent of respondents), proximity to customers (35 percent), and product quality (34 percent). More than 80 percent of respondents cited at least one of these reasons as a key factor. Other leading factors include access to skilled labor, transportation costs, supply-chain lead time, and ease of doing business.

“The wide range of reasons executives cite for shifting production shows that companies are becoming more sophisticated in their understanding of all the factors that must be considered when deciding where to manufacture,” said Michael Zinser, a BCG partner who leads the firm’s manufacturing work in the Americas. “When you look at the total cost of production for many goods, the U.S. appears increasingly attractive.”

“These findings confirm that the reshoring trend is more than anecdotal,” said Justin Rose, a BCG partner who along with Sirkin and Zinser is a coauthor of The US Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback (Knowledge@Wharton, 2012). “As the costs and benefits become more apparent, we expect more companies to consider manufacturing in the U.S. if their products are to be consumed in the U.S.”



TOPICS: Business/Economy
KEYWORDS: china; globalbusinesstip; manufacturers; reshoring
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1 posted on 05/21/2014 10:49:57 AM PDT by ckilmer
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To: ckilmer

Energy costs will also play a role.


2 posted on 05/21/2014 10:51:30 AM PDT by Jeff Chandler (Hillary may have brain damage, but what difference does it make?)
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To: ckilmer

Translation: Fracking has made energy cheaper and the Chinese workers are getting uppity, whereas the Obama depression has put US workers right where we want them.


3 posted on 05/21/2014 10:52:13 AM PDT by 2ndDivisionVet (I will raise $2M for Cruz and/or Palin's next run, what will you do?)
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To: ckilmer
The top three factors cited as driving future decisions on production locations were labor costs (cited by 43 percent of respondents), proximity to customers (35 percent), and product quality (34 percent).

0bama has destroyed wages and the middle class, created a huge mass of unemployed, so we are now cost competitive.

4 posted on 05/21/2014 10:52:53 AM PDT by FatherofFive (Islam is evil and must be eradicated)
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To: ckilmer

More union jobs? oh goody?


5 posted on 05/21/2014 10:53:23 AM PDT by ▀udda▀udd (>> F U B O << "What the hell kind of country is this if I can only hate a man if he's white?")
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To: Cringing Negativism Network

ping.


6 posted on 05/21/2014 10:56:00 AM PDT by Olog-hai
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To: ckilmer
This is the picture of manufacturing as of Apr 25, 2014


7 posted on 05/21/2014 10:56:11 AM PDT by ckilmer
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To: ckilmer

Yeah right.

Let me know when it happens.


8 posted on 05/21/2014 10:56:11 AM PDT by DannyTN
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To: Olog-hai

Ha, ha. That was my first thought.


9 posted on 05/21/2014 10:57:06 AM PDT by Obadiah (Always remember that you're unique. Just like everyone else.)
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To: Jeff Chandler

Energy costs (particularly nat gas) are playing a huge role in reshoring.


10 posted on 05/21/2014 10:58:14 AM PDT by Wyatt's Torch
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To: ckilmer
"“These findings confirm that the reshoring trend is more than anecdotal,”

No a poll that says pretty much the same thing as last years poll does not confirm anything.

Significant actual reshoring would confirm it.

11 posted on 05/21/2014 10:58:31 AM PDT by DannyTN
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To: DannyTN
April 2014


12 posted on 05/21/2014 10:58:51 AM PDT by ckilmer
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To: ckilmer

Glad to see Mexico is a rising star also. Might take some pressure off of the border.


13 posted on 05/21/2014 10:59:55 AM PDT by Lurkina.n.Learnin
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To: Jeff Chandler

Well, we have reasonably cheap energy for now. But Obama’s on it.


14 posted on 05/21/2014 11:00:50 AM PDT by 1rudeboy
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To: 2ndDivisionVet

15 posted on 05/21/2014 11:01:42 AM PDT by ckilmer
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To: Jeff Chandler

We didn’t reshore from China, but we did from Indonesia. Even with competent and efficient Singaporeans running the factory, there were just too many Muslim holidays in Indonesia for us to keep track. By the time we got our orders, the needs had completely changed.


16 posted on 05/21/2014 11:04:48 AM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: ckilmer

Not much chance. At least not with the current assault on American business, investment, and jobs . Perhaps other countries with low labor costs , yes. Or somewhat more if USA ever returns to a pro- economic growth, pro- jobs national policy. Or even just neutral


17 posted on 05/21/2014 11:06:37 AM PDT by faithhopecharity ((Brilliant, Profound Tag Line Goes Here, just as soon as I can think of one..))
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To: Vigilanteman
Could the robotics issue be a consideration?
18 posted on 05/21/2014 11:07:44 AM PDT by Digger
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To: ├čudda├čudd

How about jobs for the new cheap labor pool to be created by amnesty.


19 posted on 05/21/2014 11:08:16 AM PDT by Nextrush (AFFORDABLE CARE ACT=HEALTHCARE INDUSTRY BAILOUT ACT)
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To: expat_panama

Ping


20 posted on 05/21/2014 11:09:20 AM PDT by Lurkina.n.Learnin
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