Reshoring | More Than a Third of Large Manufacturers Are Considering Coming Back to Made in U.S.

More than a third of U.S.-based manufacturing executives at companies with sales greater than $1 billion are planning to bring back production to the United States from China or are considering it, according to a new survey by The Boston Consulting Group (BCG).

Decision makers at 106 companies across a broad range of industries responded to the survey, which BCG conducted in late February. Thirty-seven percent said they plan to reshore manufacturing operations or are “actively considering” it. That response rate rose to 48 percent among executives at companies with $10 billion or more in revenues — a third of the sample.

The top factors cited as driving future decisions on production locations: labor costs (57 percent), product quality (41 percent), ease of doing business (29 percent), and proximity to customers (28 percent). In addition, 92 percent said they believe that labor costs in China “will continue to escalate,” and 70 percent agreed that “sourcing in China is more costly than it looks on paper.”

The results are consistent with earlier BCG findings on the changing economics that are starting to favor the manufacturing of certain goods in the U.S. In a report released last month, U.S. Manufacturing Nears the Tipping Point: Which Industries, Why, and How Much?, BCG predicted that improved U.S. competitiveness and rising costs in China will put the U.S. in a strong position to add 2 million to 3 million jobs in a range of industries and an estimated $100 billion in annual output by the end of the decade.

“These survey findings confirm our own analysis and what we are hearing from major companies,” said Harold L. Sirkin, a BCG senior partner and coauthor of the firm’s “Made in America, Again” series, which began last year. “Companies are realizing that the economics of manufacturing are swinging in favor of the U.S., for goods to be sold both at home and to major export markets. This trend is likely to accelerate starting around 2015.”…

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Read More  More Than a Third of Large Manufacturers Are Considering Reshoring From China to the U.S. – MarketWatch.

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