Nearly half of US manufacturing companies are thinking of re-shoring jobs

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Forty-nine percent of U.S. manufacturing companies are considering re-shoring jobs, this according to a recent MIT Forum for Supply Chain Innovation report titled "U.S. Re-shoring: A Turning Point."

Specifically, 33.6 percent stated that they are "considering" bringing manufacturing back to the United States, while 15.3 percent of U.S. companies stated that they are "definitively" planning to reshore activities. Interestingly, one-third of the respondents did not answer this question, possibly indicating a reluctance to discuss the topic due to its sensitive nature.

The top six decision drivers for companies to re-shore are:

1. Time-to-Market (73.7%)
2. Cost Reductions (63.9%)
3. Product Quality (62.2%)
4. More Control (56.8%)
5. Hidden Supply Chain Management Costs (51.4%)
6. Protect IP (48.5%)

"Our survey indicates a significant shift in manufacturing footprint," said MIT Professor David Simchi-Levi, founder of the Forum. "Of course, the fact that 15.3 percent of the companies are moving manufacturing closer to market demand and others are considering such a move does not mean the end of manufacturing in low cost countries. It suggests that we are in the middle of a transformation from a global manufacturing strategy, where the focus is on low cost countries, to a more regional strategy, where China is for China and perhaps other emerging markets, U.S. (or Mexico and Latin America) is for the Americas and Eastern Europe is for European markets."

The survey also asked the participating U.S. companies to identify government actions that will accelerate the re-shoring process. According to the data, the number one government action that can make a difference is corporate tax reductions, with both providing tax credits and R&D incentives coming in second.

The top three manufacturing-only industries that responded to the survey were: Computers and Electronics (19.2 percent), Food and Beverage (10.6 percent) and Chemicals (8.1 percent). The category, "Other Manufacturing Companies," includes manufacturers of personal care products, golf equipment and various other companies.

In total, 340 participants completed the survey, of which 198 were manufacturing-only companies. Out of those 198 companies, 156 were U.S. companies, defined as having their headquarters in the United States.

Click here to download the report.