CHICAGO, IL, Sep 24, 2013 (Marketwired via COMTEX) —
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.”
To arrange an interview with a BCG expert, please contact David
Fondiller at 212 446 3257 or at fondiller.david@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG)
is a global management consulting firm and the world’s leading
advisor on business strategy. We partner with clients from the
private, public, and not-for-profit sectors in all regions to
identify their highest-value opportunities, address their most
critical challenges, and transform their enterprises. Our customized
approach combines deep insight into the dynamics of companies and
markets with close collaboration at all levels of the client
organization. This ensures that our clients achieve sustainable
competitive advantage, build more capable organizations, and secure
lasting results. Founded in 1963, BCG is a private company with 78
offices in 43 countries. For more information, please visit bcg.com.
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The Boston Consulting Group
David Fondiller
Director of Public Relations and Communications
Tel +1 212 446 3257
Fax +1 212 446 2801
Fondiller.David@bcg.com
SOURCE: The Boston Consulting Group
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