More large companies (20%) have decided to bring production back home from China this year than last year (13%-16%), according to a new study from The Boston Consulting Group.
And these plans are already in the works as 24%, compared to 17% -20% last year, said they will take action within the near future.
Furthermore a majority (54%) expressed interest in reshoring, validating last year’s result (also 54%.)
“These findings show that not only does interest in repatriating production to the U.S. and creating American jobs remain strong but also that companies are acting on those intentions,” said Harold L. Sirkin, a BCG senior partner.
The U.S. is a formidable global competitor as well this year as it has surpassed Mexico as the most likely destination for new manufacturing capacity to serve the U.S. market. While the percentage of executives who chose the U.S. rose from 26% to 27%, the percentage who chose Mexico slipped from 26% to 24%.
The future is looking bright as well. Respondents predicted that the U.S. would account for an average of 47% of their total production in five years, reflecting a 7% increase in U.S. capacity compared with last year’s results.
Only 11% of their capacity would be in China, a 21% decrease from last year. Respondents forecast that the share of production in Mexico, Western Europe, and the rest of Asia would also drop.
The impact on jobs will be a 5% increase as these companies plan on hiring more workers. The study found that only 17% predicted that their companies would be employing at least 5% fewer manufacturing workers in the U.S. five years from now. The survey findings reinforce a previous BCG estimate that reshored production, along with rising exports, could create between 600,000 and 1 million direct manufacturing jobs by 2020.