BCG Report Finds Businesses Will Move Operations Back to U.S.

Posted by Hugh Watson | March 22, 2016 0 Comments

A recent Boston Consulting Group (BCG) survey has found that many businesses are shifting toward bringing manufacturing operations from China back to the United States.

This trend of moving production operations back to the U.S. from overseas is known as reshoring, and it’s expected to cut costs, bring products closer to customers, and restore the autonomy of businesses.

According to the BCG report, which surveyed 263 U.S. manufacturing executives in September, 17% of U.S. manufacturers are in the process of “actively reshoring,” while many more businesses are in the beginning stages of planning their reshoring efforts.

The consistent rise in wages at Chinese factories has been a leading factor driving businesses to opt for U.S.-based production and distribution of factory capacity goods throughout the U.S. and North America.

In fact, 31% of surveyed executives with at least $1 billion in annual revenue said they will likely relocate production facilities to the U.S. within the next five years.

In addition to increased wages abroad, increased American productivity also continues to fuel the reshoring trend that began more than five years ago. Advanced manufacturing technologies and lower automation costs are contributing to unprecedented levels of production in the U.S.

Despite enhanced automation in U.S. manufacturing, factory workers shouldn’t fear being replaced by machines; half of the executives surveyed predicted that reshoring over the next five years would contribute to an employment increase of at least 5%.

In the near future, however, reshoring could cause a few hiccups in global profits. Many executive believe the decline in oil prices and the strength of the dollar will increase the cost of American-made products abroad, the BCG reports.

Assembly Fasteners, Inc. (AFI) is staying ahead of the curve by helping many customers to reshore their production operations.

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