ith continued rising labor and other manufacturing costs for overseas imports from China and other countries, “near-shoring” increasingly is being viewed as an opportunity to better serve US demand, according to a recent report by Alix- Partners LLP (New York), a global business advisory firm.
The company says about half of C-level and other senior executives of manufacturing- oriented companies interviewed see near- shoring as attractive. Manufacturing inside the US is viewed as the most attractive choice for such re-sourcing, by 35% of those surveyed, up from 21% in a similar survey a year ago. According to the AlixPartners Manufacturing Re-shoring and Near-shoring Outlook Survey, 50% of executives interviewed in the current survey view last year’s top choice, Mexico, as the top choice again this year.
firm’s Transportation Practice. “As manufacturing costs have increased in China and elsewhere in Asia, the cost and time factors involved in shipping goods across vast distances are
The survey results also suggest that rising domestic demand in developing countries such as China may encourage even more near-shoring and reshoring in the West in the future, as companies in China and other developing markets redirect their capacity toward local consumption rather than export, with over a third, 34%, of executives predicting that would be the case.
While Mexico remains most attractive for near-shoring, reshoring manufacturing to the US gained 14% among executives surveyed.
magnified and, whether it’s in Mexico or the US, any company that’s not at least considering alternative manufacturing sources closer to their home market is certainly missing an opportunity.” As in last year’s survey, lower freight costs and improved speed-to-market were the two most-cited advantages ex-
“As manufacturing costs have increased in China and elsewhere in Asia, the cost and time factors involved in shipping goods across vast distances are magnified.”
“A lot has been written of late about America’s manufactur- ing rebound, and there certainly has been a very impressive rebound; however, Mexico still remains the near-shoring locale of choice for companies looking to overcome the higher costs of doing business today in places like China,” says Foster Finley, managing director at AlixPartners and co-lead of the
pected from the decision to near-shore. Thirty-seven percent of executives cited hoped-for lower freight costs, up from 34% in the 2011 survey, and 31% pointed to speed-to-market, up from 28% a year ago. Significantly, and perhaps hand-in-hand with both of those, 26% cited lower inventory costs as the big- gest expected advantage, up from 20% last year.