June 23, 2022
What the Heck is the “Metaverse” and Why Should my Business Care?
by Rick McKenna CRONIN As I write this article, I’m tapping away on my computer aboard my boat…Read More
Posted on September 25, 2013
The study found that 54 percent of U.S.-based manufacturing executives at companies with sales greater than $1 billion are planning to “re-shore” production, or are considering it, up from 37 percent who responded to a similar survey in February 2012. When asked whether they expect to move production in light of rising wages in China, 21 percent of respondents”around twice as many as in 2012″said they are “actively doing this” or that they “will move production to the U.S. in the next two years.”
The new survey, conducted last month, is based upon responses from more than 200 decision makers at companies across a broad range of industries. Virtually all of the companies manufacture in the U.S. and overseas and make products for both U.S. and non-U.S. consumption.
The Boston Consulting study is consistent with a developing consensus among economists that rising wages overseas and the need for tighter control of supply chains is prompting manufacturers to boost their production in the United States. The 2012 U.S. Re-shoring Survey by the MIT Forum for Supply Chain Innovation similarly found that manufacturers are taking another look at domestic production due to higher labor costs in developing countries, energy costs, political stability issues, and time-to-market concerns.
The trend is good news for Massachusetts, where “manufacturing is alive and well, and has a healthy future,” according to a report last year entitled Staying Power II: A Report Card on Manufacturing in Massachusetts, by Professor Barry Bluestone and his team at Northeastern University.
Some key findings of the report about Massachusetts manufacturing:
While cost issues and global competition are challenges, the study finds, the skills and work ethic of the state’s workforce are powerful reasons to stay in Massachusetts. But employers are already experiencing difficulty in hiring skilled workers, and an upcoming wave of retirements will create up to 100,000 job vacancies over the next ten years. The 70 percent of manufacturing firms foreseeing expansion of employment over the next five years must face up to this “recruitment challenge” by focusing on workforce development and promoting manufacturing careers.
The Boston Consulting Group projects that production reshored from China and higher exports due to improved U.S. competitiveness in manufacturing could create 2.5 million to 5 million American factory and related service jobs by 2020.
“Over the past couple of years, we’ve projected an improvement in U.S. manufacturing competitiveness by 2015 that would help drive an American manufacturing revival,” said Harold L. Sirkin, a BCG senior partner. “The results of our latest survey make clear that a profound shift in attitude is beginning.”