More than a third of US manufacturing companies recently surveyed by the Boston Consulting Group say they plan to bring production back to the United States. Among companies with revenue of $1 billion or more, 37 percent say they'll move some operations back; 48 percent of companies with revenue of $10 billion or more plan to repatriate production, according to BCG.
Interest in shifting manufacturing back to the US is particularly strong among companies in several sectors, according to BCG: transportation goods, appliances and electrical equipment, furniture, plastic and rubber products, machinery, fabricated metal products, and computers and electronics. Companies in these industries say the advantages of offshore manufacturing — among them, low-cost labor — are starting to diminish. Specifically, says BCG:
- In the new survey, 67 percent of respondents in rubber and plastic products, 42 percent in machinery, 41 percent in electronics, 40 percent in computers, and 35 percent in fabricated metal products said they expect that their companies will reshore production from China to the U.S.
Among the reasons cited by these companies for moving back onshore are increasing labor costs overseas, concerns about product quality, and a desire to be closer to customers, says BCG in the press release cited above. Additionally, 92 percent of survey respondents 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.”
BCG says the results are consistent with findings in earlier reports.