Businesses Are Rethinking Global Manufacturing Strategies
“Due to rising foreign wages, tariffs on parts and finished products, and reconsidering total cost of ownership, the Reshoring Institute predicts companies will increasingly be motivated to reshore.”
— Rosemary Coates
SILICON VALLEY, CALIFORNIA, USA, September 24, 2019 /EINPresswire.com/ — The Reshoring Institute has released the results of the 2019 Survey of Global Manufacturers “The Changing Trends of Reshoring in the United States,” and published it for download here: https://reshoringinstitute.org/annual-survey-of-manufacturers/
For more than three decades, moving production offshore was a relatively easy decision. With an almost endless supply of low-cost labor, the decreasing costs of transportation, low currency exchange rates, and significant foreign-government incentives, hundreds of thousands of jobs left the U.S. for lower-cost nations like China. The once overwhelming cost advantages, however, are not what they once were. A growing number of businesses are rethinking their global manufacturing strategies.
• More than half of the executives surveyed reported that they were planning or considering reshoring activities in the next five years.
• 97% said that they would consider a domestic source for parts if the price and quality were competitive to foreign suppliers.
• In addition to the growing attractiveness of U.S. markets, the unpredictability of tariffs and trade regulations leave companies conducting international business wary of unexpected cost increases.
• The survey found that from 2017 to 2018, the number of companies operating in multiple global locations decreased by 10%.
Due to rising foreign wages, rising tariffs on steel, aluminum, and electric components, and reconsiderations of the total cost of ownership, The Reshoring Institute predicts that companies will increasingly be motivated to participate in reshoring efforts in the coming years.
While the majority of companies reported interest in reshoring, some remain hesitant. Respondents were asked, “If you are considering reshoring and have not yet started, what if anything, is delaying you in doing so?” The largest factor in delaying companies from reshoring, comprising of 54.17% share of responses was concerns of high labor costs. Other factors include not having a facility in the U.S. (50%) as well as finding a workforce with the skills needed for production (29.17%). Executives were also concerned by resistance from the Board of Directors (20.83%), lack of internal expertise (12.50%), high material costs (8.33%), and environmental regulations in the U.S. (8.33%).
The complete survey results are available here https://reshoringinstitute.org/annual-survey-of-manufacturers/
About the Reshoring Institute:
The Reshoring Institute, a 501c3 non-profit organization, offers free, downloadable research from its website, created and curated by graduate student interns from the University of San Diego, Santa Clara University, University of Southern California, St. Louis University, Rutgers University and the University of Kentucky. We also offer personalized consulting assistance at reasonable fees. The Institute’s mission is to provide research and support for companies bringing manufacturing and services back to America and to educate student interns about the business of manufacturing. For more information, contact Rosemary Coates, Executive Director, at rcoates@ReshoringInstitute.org