The Uncertainty of Reshoring
Confusing news for manufacturers, as two different reports offer contradicting conclusions on the effectiveness of reshoring—the practice of bringing manufacturing jobs back to the US. On the positive side is a new report by A.T. Kearney, in which their “U.S. Reshoring Index shows that, for the fourth consecutive year, reshoring of manufacturing activities to the United States has once again failed to keep up with offshoring. This time the index has dropped to –115, down from –30 in 2014, and it represents the largest year-over-year decrease in the past 10 years.”
On the more positive side is the Boston Consulting Group survey, whose results showed that “Thirty-one percent of respondents to BCG’s fourth annual survey of senior U.S.-based manufacturing executives at companies with at least $1 billion in annual revenues said that their companies are most likely to add production capacity in the U.S. within five years for goods sold in the U.S., while 20% said they are most likely to add capacity in China…The share of executives saying that their companies are actively reshoring production increased by 9% since 2014 and by about 250% since 2012. This suggests that companies that were considering reshoring in the past three years are now taking action. By a two-to-one margin, executives said they believe that reshoring will help create U.S. jobs at their companies rather than lead to a net loss of jobs.”
Which one people choose to believe will come down to the details in how the surveys were conducted, as well as personal biases. Taken together though the reports contradictory findings serve as a reminder of the continuing challenges facing America’s manufacturing industry.
