Economic Watch: Trucking Freight Boom Forecast
September 24, 2013
There could be a lot more freight for trucking to move in the future from the nation’s manufacturing sector.
More than half of U.S.-based manufacturing executives at companies with sales greater than $1 billion are planning to bring back production to the U.S. from China or are actively considering it, according to a new survey by the management consulting firm, The Boston Consulting Group.
Photo: Evan Lockridge
The share of executives who are planning to “reshore” or are considering it, rose to 54% compared with 37% of executives who responded to a similar BCG survey in February 2012. The new survey, conducted last month, elicited responses from more than 200 decision makers at companies across a broad range of industries. Virtually all manufacture in the U.S. and overseas and make products for both U.S. and non-U.S. consumption.
“These findings confirm that the reshoring trend is more than anecdotal,” said Justin Rose, a BCG partner “As the costs and benefits become more apparent, we expect more companies to consider manufacturing in the U.S. if their products are to be consumed in the U.S.”
The survey also found a sharp increase in the percentage of executives who are actively engaged in the process of shifting production to the U.S. When asked whether they expect to move production in light of rising wages in China, 21%, 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.”
In a separate report released in last month, BCG projected 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 and a coauthor of the study. “The results of our latest survey make clear that a profound shift in attitude is beginning.”
The top three factors cited as driving future decisions on production locations were labor costs, cited by 43% of respondents; proximity to customers, 35 percent; and product quality, 34%. More than 80% cited at least one of these reasons as a key factor. Other leading factors include access to skilled labor, transportation costs, supply-chain lead time and ease of doing business.