Executive Briefings

Reshoring to U.S. Is in Full Swing - Unless It's Declining. What to Believe?

In December, two conflicting reports were released, one by A.T. Kearney and one by the Boston Consulting Group. The A.T. Kearney report states that reshoring may be "over before it began," and the Boston Consulting Group report states that it is increasing. Why the difference in opinion and who is right?

This was the second report by A.T. Kearney, in which their "U.S. Reshoring Index shows that, for the fourth consecutive year, reshoring of manufacturing activities to the United States has once again failed to keep up with offshoring. This time the index has dropped to –115, down from –30 in 2014, and it represents the largest year-over-year decrease in the past 10 years."

On the other hand, the Boston Consulting Group survey results showed that "Thirty-one percent of respondents to BCG’s fourth annual survey of senior U.S.-based manufacturing executives at companies with at least $1bn in annual revenues said that their companies are most likely to add production capacity in the U.S. within five years for goods sold in the U.S., while 20 percent said they are most likely to add capacity in China...The share of executives saying that their companies are actively reshoring production increased by 9 percent since 2014 and by about 250 percent since 2012. This suggests that companies that were considering reshoring in the past three years are now taking action. By a two-to-one margin, executives said they believe that reshoring will help create U.S. jobs at their companies rather than lead to a net loss of jobs."

The difference of opinion is based on different data.

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This was the second report by A.T. Kearney, in which their "U.S. Reshoring Index shows that, for the fourth consecutive year, reshoring of manufacturing activities to the United States has once again failed to keep up with offshoring. This time the index has dropped to –115, down from –30 in 2014, and it represents the largest year-over-year decrease in the past 10 years."

On the other hand, the Boston Consulting Group survey results showed that "Thirty-one percent of respondents to BCG’s fourth annual survey of senior U.S.-based manufacturing executives at companies with at least $1bn in annual revenues said that their companies are most likely to add production capacity in the U.S. within five years for goods sold in the U.S., while 20 percent said they are most likely to add capacity in China...The share of executives saying that their companies are actively reshoring production increased by 9 percent since 2014 and by about 250 percent since 2012. This suggests that companies that were considering reshoring in the past three years are now taking action. By a two-to-one margin, executives said they believe that reshoring will help create U.S. jobs at their companies rather than lead to a net loss of jobs."

The difference of opinion is based on different data.

Read Full Article