Modern-Glass-Building

Manufacturers Bringing Production Back From China

Oct. 23, 2014
Respondents of a new study 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.

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.

About the Author

Adrienne Selko | Senior Editor - MH&L, IW, & EHS Today

Adrienne Selko has written about many topics over the 17 years she has been with Endeavor Business Media and currently focuses on workforce development strategies. Previously Adrienne was in corporate communications at a medical manufacturing company as well as a large regional bank.

She is the author of Do I Have to Wear Garlic Around My Neck? which made the Cleveland Plain Dealer's best sellers list. She is a senior editor at Material Handling & Logistics, EHS Today, and IndustryWeek. 

Editorial Mission Statement:

Manufacturing is the enviable position of creating products, processes, and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I Find Manufacturing Interesting: 

On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated, and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world.