Report shows offshoring uptick.
Global strategy and management consulting firm A.T. Kearney, Chicago, has released its 2014 Reshoring Index. The change in ratio between U.S. manufacturing imports and gross output is expected to show a year-over-year decline, lower by 20 basis points from 2013, as offshoring to foreign manufacturing markets outpaces reshoring.
"While the so-called reshoring trend has helped improve the mood of U.S. manufacturing since the recession, the reality is that the import value of manufactured goods into the U.S. from 14 low-cost Asian countries has grown at an average of 8% per year in the last five years," said Pramod Gupta, A.T. Kearney principal and study coauthor.
The top three reshoring industries are electrical equipment, appliance and component manufacturing at 15%, transportation equipment manufacturing at 15% and apparel manufacturing at 12% of the cases in the study.
Improvement in delivery time led the reasons executives gave in favor of reshoring, with quality improvement a close second followed by brand/image.
While there has been an overall lift in U.S. manufacturing for five straight years since 2009, imports of offshored manufactured goods into the U.S. have increased at a faster rate than any return of manufacturing operations to our soil and, for the 14 top offshoring locations combined, amounted to $630 billion in 2013.