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Report: Large manufacturers to bring production to U.S.

By , - Last modified: August 31, 2012 at 8:47 AM

The Boston Consulting Group, a Boston-based management consulting and business strategy firm, has published a report saying the U.S. could faster become a destination for manufacturing companies with sales of more than $1 billion in coming years.

BCG based the report on a survey of 106 companies from a broad range of industries and found that 37 percent of them said they plan to reshore manufacturing operations or are actively considering it. The response rate rose to 48 percent among executives at companies with $10 billion or more in revenue, which represented about a third of the sample, according to BCG.

Rising foreign labor costs, product quality, ease of doing business and proximity to customers were the most common reasons large companies chose to bring manufacturing back to the U.S.

Seven industries are closest to tipping points that would have them bringing production back to the U.S. from countries such as China, BCG said:

• Transportation goods

• Appliances and electrical equipment

• Furniture

• Plastic and rubber products

• Machinery

• Fabricated metal products

• Computers and electronics

In the latest survey, 67 percent of respondents in rubber and plastic products, 42 percent in machinery, 41 percent in electronics, 40 percent in computers and 35 percent in metal fabricated products said they expect their companies will reshore production from China to the U.S.

BCG estimates that by the end of the decade, as such trends grow, the U.S. could add 2 million to 3 million jobs and $100 billion in annual economic output.

How to bolster Pennsylvania’s manufacturing base has been a significant discussion in the past weeks due to the Governor’s Manufacturing Advisory Council releasing its suggestions.

More information from BCG’s surveys and studies can be found here.


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