Survey: Most Large Manufacturers Plan to Reshore Production from China
September 24, 2013
A majority of manufacturing executives at companies with sales greater than $1 billion claim in a new survey that they are pulling production back from China and returning it to the U.S., or are at least considering such a move. Labor costs, proximity to customers and product quality are key reasons for production location decisions. The number of executives who are reshoring or considering bringing back production from China surged considerably from 37 percent in 2012 to 54 percent, according to the survey Shifting production back to the U.S. could have a significant impact on manufacturing job growth. A separate report released by BCG in August noted that greater reshoring and exports could potentially create "2.5 million to 5 million American factory and and related service jobs by 2020." The reshoring trend has been on the uptick in recent years, with the help of efforts such as The Reshoring Initiative Beyond such initiatives, reshoring efforts are echoing throughout industry events. Author Michele Nash-Hoff, who wrote "Can American Manufacturing Be Saved," told sister publication IMT Reasons for industry reshoring efforts vary widely, according to the BCG survey. Twenty-one percent of survey respondents who were asked whether they expect to move production due to rising wages in China said that they are actively doing so, or expect to shift operations in the next two years. The top factors cited by survey participants when asked what influences decisions about location were labor costs (43 percent), proximity to customers (35 percent), and product quality, with more than 80 percent of respondents citing one of these reasons as a key location factor. Other reasons include skilled labor, transportation costs, supply-chain lead time, and ease of doing business.