Is Reshoring for Real?
There has been lots of buzz about reshoring—the opposite of offshoring—in the United States. A report just issued by A.T. Kearney looks at the real numbers behind the perception that manufacturing is coming back to our shores.
In the 2014 Reshoring Index, Kearney tracks the flow of manufactured goods over a 10-year period to show the change in ratio between U.S. manufacturing imports and gross output during that time period. The index shows a year-over-year decline, lower by 20 basis points from 2013, as offshoring to foreign manufacturing markets outpaces reshoring.
Key highlights of the report include:
- The top three reshoring industries are electrical equipment, appliance and component manufacturing, with 15 percent of the cases; transportation equipment manufacturing, with 15 percent; and apparel manufacturing, with 12 percent.
- The main reason for reshoring was improvement in delivery time, with quality improvement a close second, followed by brand/image.
- While there has been an overall lift in U.S. manufacturing over the past five years, imports of offshored goods into the U.S. have increased at a faster rate than any return of manufacturing operations to the U.S. and, for the 14 top offshoring locations combined, amounted to $630 billion in 2013.
The top 14 offshoring locations are China, Taiwan, Malaysia, India, Vietnam, Thailand, Indonesia, Singapore, The Philippines, Bangladesh, Pakistan, Hong Kong, Sri Lanka, and Cambodia.
NPR reports that none of this is news to Harry Moser, the founder and president of The Reshoring Initiative, which helps manufacturers relocate to the United States. Moser has been a big promoter of the reshoring trend, but he says the phenomenon can be overstated.
What are your thoughts about reshoring? Is it for real?