A recent survey of U.S. businesses offers a bit of long-overdue positive news for the Nation’s economy.
A Michigan State University study shows that U.S. firms, facing a number of issues associated with manufacturing products in emerging countries amid rising global instability, are increasingly considering moving their manufacturing operations back to the United States. Many of the companies are re-evaluating overseas manufacturing because of rising labor costs in emerging countries, high oil prices and increasing transportation costs; global risks such as political instability; and a handful of other factors.
“Going overseas is not the panacea that it was thought of just a decade or so ago,” said Michigan State University supply chain expert Tobias Schoenherr. “Companies have realized the challenges and thus are moving back to the United States.”
Based on a survey of 319 firms, the study indicates that 40 percent of manufacturing firms believe a growing number of businesses are considering moving manufacturing plants back to the United States from countries such as China and India. The most likely industries to “reshore” in the U.S. are aerospace and defense, industrial parts and equipment, electronics, and medical and surgical supplies.
The firms that were included in the study also indicated that nearly 38 percent of their competitors have already taken steps to bring some manufacturing back to the United States.
Other factors contributing to the growing movement of American companies back to domestic manufacturing are concerns over erosion of intellectual property overseas and product-quality problems created by overseas manufacturing.
“From my communication with some firms, I also sense a genuine desire to help the U.S. economy and to bring back jobs,” Schoenherr said.