Reshoring Trend Will Continue

A number of economic forces are starting to favor the manufacturing of certain goods in the United States. China’s low-cost advantage is quickly shrinking in several industries, including appliances and electrical equipment, computers and electronics, fabricated metal products, furniture, machinery, plastic and rubber products, and transportation goods.

According to the Boston Consulting Group Inc. (BCG), production of 10 percent to 30 percent of U.S. imports from China in these industries, which account for approximately 70 percent of goods that the U.S. imports from that nation, could shift to the United States before the end of the decade.

“Not long ago, many companies regarded China as the low-cost default option for manufacturing,” says Michael Zinser, a BCG partner who leads the firm’s manufacturing work in the Americas. “[Today], companies are coming to the conclusion that the U.S. is more competitive when the total costs of manufacturing are accounted for.”

ASSEMBLY’s 2012 State of the Profession survey reflects that trend. For instance, 35 percent of respondents in the plastics and rubber products industry claim that their company has reshored assembly operations during the past 12 months. Other industries that have shifted work back to the states include transportation equipment (34 percent), fabricated metal products (18 percent), electrical equipment and appliances (16 percent) and machinery manufacturing (16 percent).

That trend is expected to continue well into the future. Twenty-two percent of assembly professionals in the transportation equipment sector expect their company to reshore operations during the next 12 months. Other industries that expect to reshore include electrical equipment and appliances (21 percent), machinery (18 percent), and plastics and rubber products (18 percent).

All sizes of manufacturers are actively pursuing reshoring initiatives. In fact, almost one-quarter (23 percent) of mid-sized manufacturers (companies with 250 to 500 employees) plan to shift assembly operations back to the states during the next 12 months vs. 21 percent of small manufacturers (companies with less than 50 employees) and 9 percent of large manufacturers (companies with 1,000 or more employees).

Austin has been senior editor for ASSEMBLY Magazine since September 1999. He has more than 21 years of b-to-b publishing experience and has written about a wide variety of manufacturing and engineering topics. Austin is a graduate of the University of Michigan.

The ASSEMBLY Show South

ASSEMBLY is thrilled to return to the Music City Center in Nashville, TN for The ASSEMBLY Show SOUTH on May 1-2, 2024. This is a booming time for manufacturing and the U.S. South is right in the heart of the action. According to ASSEMBLY’s most recent annual capital spending survey, the South is projected to account for 31 percent of total spending this year, marking the fifth straight year this region has accounted for at least 30 percent of capital spending in the U.S.

In this session, manufacturers will learn how Quality function deployment (QFD) can transform consumers’ qualitative demands into quantitative parameters that will shape the design of their product and, ultimately, their manufacturing process.

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