A recent survey on nearshoring showed that 18% more manufacturing executives would choose the US as their preferred location than only two years ago. The reasons for this are many, but one of the most attractive—and newsworthy—is that U.S. manufacturing costs are now equal to those of Mexico. Perhaps even more surprising and significant is that by 2015, U.S. manufacturing costs are predicted to be equal to China. These reports have a number of business owners asking, “why would I send my business overseas, when it costs the same to have it manufactured here at home?”
With these numbers coming in, the same survey revealed that in the next year, 84% of C-level executives will consider the decision to nearshore a major one. Furthermore, 58% of these surveyed executives stated that the business that they’ve already nearshored has saved them money.
These cost savings, or lack of savings by going overseas, are a part of what helped bring about America’s manufacturing renaissance. But that’s not all. Factors such as rising energy costs in other countries (while our energy costs are decreasing), increased focus on sustainability, higher logistics costs overseas, American technology innovations, and risks to the global supply chain have added to the return.
Five years ago it may have been hard for someone to believe that America would be as cost effective a place to manufacture as Mexico and China, but today, it’s reality. Add to that the fact that people are recognizing that American goods are higher quality, and it’s easy to see why this is the direction manufacturing has taken. It will be interesting to see where we are five years from now, won’t it?