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Onshoring Expected to Net $2.5 Billion

In the grand scheme of the manufacturing industry, $2.5 billion is not a lot of money. But for electronics companies and workers in the US, it’s a bonanza. Within the next three years, reports the IPC, both OEMs and EMS companies are expected to bring more than $2 billion worth of manufacturing services and jobs back onshore.

Respondents to IPC’s survey of more than 200 electronics companies indicated they would establish both new operations and repatriate offshore manufacturing through 2015. If past trends continue, most of that value will come from OEMs:

    Survey results showed that original equipment manufacturers (OEMs) were largely responsible for operations returned to North America from overseas since 2009, accounting for more than 90 percent of the value and number of jobs brought back. The electronics manufacturing services (EMS) industry was also a big contributor. One-quarter of operations that returned to North American since 2009 came from China, with other countries making up the other 75 percent.

    The EMS industry accounts for the largest share of overseas operations that participating companies plan to bring back to North America in the next three years. New operations, however, represent a much larger share of future North American production, and these planned new operations were reported primarily by OEMs.

The reasons cited most often for onshoring include quality control and customer proximity, the IPC finds. Other research found that rising labor costs in China are also driving the move back to the US. (See: Data Points to More Onshoring and Execs Cite Reasons for Onshoring.)

In upcoming posts, we’ll take a closer look at the IPC findings.

3 comments on “Onshoring Expected to Net $2.5 Billion

  1. stochastic excursion
    August 20, 2012

    The trend to onshoring looks promising, and this new data indicates that plans along these lines are taking shape.  It's about time the electronics industry brought some manufacturing activity stateside, but the driving factors involved mean this will probably be a cyclical trend.

  2. Houngbo_Hospice
    August 21, 2012

    @stochastic excursion

    but the driving factors involved mean this will probably be a cyclical trend.

    The Bring Back Jobs Home (BBJH) trend may not last long if it is not backed up with appealing motivating factors. Apart from tax reduction, we will certainly need other motivating factors to attract and maintain manufacturing companies onshore.

  3. SP
    August 22, 2012

    Though manfucaturing looks very lucrative, its has high operational cost associated with it. Labor cost, raw material cost and basic services cost. And its definitely not an easy business. You need to maintan standards and keep delivering.

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