Made in America, Again: Third Annual Survey of U.S.-Based Manufacturing Executives

Do Not Reproduce More Than Two Slides or Charts Without Permission
Made in America, Again
Third Annual Survey of U.S.-Based Manufacturing Executives
October 2014

1
Copyright © 2014 by The Boston Consulting Group, Inc. All rights reserved.
Executive summary Key takeaways from BCG’s third annual survey of U.S.-based manufacturing executives
•
54% of respondents are considering bringing production back to the U.S.
–
Similar to 2013 finding and up nearly 50% since 2012
•
20% increase in the number that report that they are actively reshoring now
–
Growth on top of a nearly 90% increase from 2012 to 2013
•They anticipate a 7% rise in future manufacturing capacity in the U.S. and a 5% to 20% decrease in capacity in China, Western Europe, and Mexico
•Respondents say that the U.S. has surpassed China and Mexico to become the most likely destination for companies that are shifting manufacturing capacity to serve the U.S. market
•Access to a skilled workforce appears to be a relative U.S. strength
•4.5 times as many manufacturers cite increased skilled labor as a driver for moving production to the U.S. than those who cite it as a reason for offshoring from the U.S.
•The key driver is a desire to boost productivity and improve local economics
•56% believe that decreasing costs in automation have improved their product competitiveness
•71% believe that advanced manufacturing technologies will improve the economics of localized production
•Executives who anticipate net job gains within the next five years outweigh those predicting declines by a 3-to-1 margin
1
2
3
4
5
Interest in reshoring production to the U.S. remains strong, validating our 2013 survey findings; the percentage of companies actively moving operations back to the U.S. is increasing
Executives increasingly expect their U.S. manufacturing footprint to grow more than that in other countries
The desire for increased regionalization, access to a skilled workforce, and local control of quality are the major drivers for expanding manufacturing capacity in the U.S.
Most companies plan to increase investment in automation or other advanced manufacturing technologies within five years
Executives believe in the potential for ongoing job creation

2
Interest in reshoring production to the U.S. remains strong, validating 2013 survey results
Sources: BCG Manufacturing Survey, February 2012, August 2013, and August 2014.
Note: Numbers in the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: “Given the fact that China’s wage costs are expected to grow, do you expect your company will move manufacturing to the United States?” Question asked only of companies that currently manufacture in China. N = 161.
71316388817101817200102030405060
Interest in reshoring manufacturing to U.S. (%)
+47%
Yes, we are already actively doing this
Yes, we will move production to the U.S. in
the next two years
Yes, we are actively considering doing this,
although we have not made a final decision
Yes, we will consider doing this in
the near future
2014
54
2013
54
2012
37
1

3
Around 20% more respondents this year say that their companies are actively reshoring
1671305101520
Interest in reshoring manufacturing to U.S. (%)
+20%
+88%
Yes, we are already actively doing this
2014
2013
2012
1
Note: Numbers in the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: “Given the fact that China’s wage costs are expected to grow, do you expect your company will move manufacturing to the United States?” Question asked only of companies that currently manufacture in China. N = 161.

4
U.S.-based executives anticipate that a larger share of their total manufacturing capacity will be in the U.S. in five years
4414107121247118710150102030405060
-22%
-5%
-19%
United States
-21%
+7%
Rest of the World
Rest of Asia
China
Anticipated mix of total manufacturing capacity in five years (%)
+23%
Mexico
Western Europe
2
Survey year
2014
2013
Sources: BCG Manufacturing Survey, August 2013 and August 2014.
Note: Numbers in the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: "What percentage of your manufacturing [will be] located in each of the following regions (five years from now)?"
Expected increase for the U.S. differs significantly from the outlook for China, Western Europe, and Mexico
Note: Question addresses total manufacturing capacity, though the executives surveyed were based in the U.S.

5
The U.S. has surpassed China and Mexico as the most likely destination for new capacity to serve the U.S. market
Note: Numbers atop the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: "In the next five years, how will the supply chain change for the products you intend to sell inside the U.S.?” All other destination countries accounted for 18% of responses in 2013 and 26% of responses in 2014.
2
3026262324270102030
Most likely destination for new manufacturing capacity (%)
-7
-2
+1
China
Mexico
United States
2013
2014
Survey year

6
Companies that have reshored cite increased regionalization, strong workforce and environment, and local control
7978696374717574131421281921171788101078810020406080100
Shorten our supply chain
Respondents (%)
Improve quality and yield
Provide local control over manufacturing processes
Make it easier to do business
Access to skilled workforce
and talent
Be closer to suppliers
Be closer to customers
Reduce shipping costs
Primary reasons for moving to U.S.
Note: Question asked: "Why did your company move production to the U.S. from another country? Please select how much you agree or disagree with each of the following reasons for change."
3
Strongly or somewhat disagree
Strongly or somewhat agree
Neutral
•
Strong workforce and business environment
•
Control over process and quality
•
Benefits of increased regionalization

7
Manufacturers are ~4.5 times more likely to move production to the U.S. than from the U.S. to access skilled labor
3
1774020406080100
~4.5x
Production moved from the U.S.1
Respondents citing access to skilled workforce as a strong factor for moving production (%)
Production moved to the U.S.2
Source: BCG Manufacturing Survey, August 2014.
Note: Chart counts respondents who marked "Strongly or somewhat agree." Numbers atop the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding.
1 Question asked: "Why did your company move production to another country from the U.S.? Please select how much you agree or disagree with each of the following reasons for change."
2Question asked: "Why did your company move production to the U.S. from another country? Please select how much you agree or disagree with each of the following reasons for change.”

8
Executives plan to invest in automation or other advanced manufacturing to enhance product competitiveness
56711647225281710020406080100
Responses (%)
Strongly or somewhat disagree
Strongly or somewhat agree
Neutral
Decreasing automation cost improved my product competitiveness against products sourced from low-cost countries
Manufacturing executives believe automation and advanced manufacturing will promote the following:
•
Reduce costs and increase their competitiveness
•
Allow them to benefit from being closer to suppliers and customers
Note: Task stated: "Please select how much you agree or disagree with each of the following reasons for change.” N = 252.
4
Advanced manufacturing will improve the economics of localized production
The U.S. is strongly positioned to benefit from manufacturers that seek to increase regionalization, especially as automation costs decline
We will invest in additional automation or advanced manufacturing technologies in the next five years

9
Three times as many executives expect trends to drive net growth in U.S. manufacturing jobs within five years
Note: Question asked: "Based on current trends, what do you expect to happen to the number of manufacturing jobs in your company over the next five years?”
1Includes responses of less than +/-1% per year.
5
10% 17% 23% 34% 10% 6% 1%
40
30
0
20
10
Respondents (%)
Increase by >20%
Increase by 10%-20%
Increase by 5%-9%
Flat
Decrease by 5%-9%
Decrease by 10%-20%
Decrease by >20%
Job loss
50% of respondents anticipate net job creation
17% of respondents anticipate net job losses
1
Job creation
Anticipated job creation outweighs loss by a nearly 3-to-1 margin

10
Survey methodology
Since 2012, The Boston Consulting Group (BCG) has conducted an annual online survey of senior- level, U.S.-based manufacturing executives. This year’s survey, which the firm's Center for Consumer and Customer Insight conducted in August, one year after last year's, elicited 252 responses. The responses were limited to one per company.
Virtually all of the respondents work for companies that manufacture in the U.S. and overseas and make products for both U.S. and non-U.S. consumption. Respondents are decision makers in companies with more than $1 billion in annual revenues, across a wide range of industries:
•
Electronic and other electrical equipment and components
•
Computer equipment
•
Furniture and fixtures
•
Transportation equipment
•
Fabricated metal products, except machinery and transportation
•
Industry and commercial machinery
•
Rubber and miscellaneous plastic products
•
Petroleum refining and related industries
•
Stone, clay, glass, and concrete products
•
Printing, publishing, and allied industries
•
Apparel and other finished products made from fabrics and similar materials
•
Chemicals and allied products
•
Paper and allied products
•
Textile mill products
•
Primary metal industries
•
Food and kindred products
•
Leather and leather products

11
This research is part of BCG’s series on the shifting dynamics of global manufacturing
Authors of this research
Selected publications and
research in the series
The Shifting Economics of Global Manufacturing: How Cost Competitiveness Is Changing Worldwide
A report by The Boston Consulting Group
August 2014
Majority of Large Manufacturers Are Now Planning or Considering “Reshoring” from China to the U.S. (press release)
Survey findings by The Boston Consulting Group
September 2013
The U.S. Skills Gap: Could It Threaten a Manufacturing Renaissance?
August 2013
Behind the American Export Surge: The U.S. as One of the Developed World’s Lowest-Cost Manufacturers
August 2013
U.S. Manufacturing Nears the Tipping Point: Which Industries, Why, and How Much?
March 2012
Made in America, Again: Why Manufacturing Will Return to the U.S.
August 2011
Note: Publications are available on BCG’s thought leadership portal, www.bcgperspectives.com, or at www.bcg.com.
Harold L. Sirkin Senior partner and coauthor of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback (Knowledge@Wharton, November 2012)
BCG Chicago Michael Zinser Partner, coleader of the Manufacturing practice, and coauthor of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback BCG Chicago
Justin Rose Partner, leader of green energy in the Americas, and coauthor of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback BCG Chicago
To request a media interview, please contact Eric Gregoire at gregoire.eric@bcg.com.
To discuss the findings with a BCG expert, please contact Payal Sheth at sheth.payal@bcg.com.
To read other publications in this series, please go to www.bcgperspectives.com.

bcg.com | bcgperspectives.com
Thank you

Made in America, Again: Third Annual Survey of U.S.-Based Manufacturing Executives

Made in America, Again: Third Annual Survey of U.S.-Based Manufacturing Executives

Recommended

More Related Content

What's hot

What's hot(20)

Viewers also liked

Viewers also liked(20)

Similar to Made in America, Again: Third Annual Survey of U.S.-Based Manufacturing Executives

Similar to Made in America, Again: Third Annual Survey of U.S.-Based Manufacturing Executives(20)

More from Boston Consulting Group

More from Boston Consulting Group(20)

Recently uploaded

Recently uploaded(20)

Made in America, Again: Third Annual Survey of U.S.-Based Manufacturing Executives