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Poll: U.S. Overtakes China as Top Site for Expanded Production

By Andy Szal | December 14, 2015

(AP Photo)

The U.S. has surpassed China as the top destination for expansion by leading American manufacturers, according to participants in a recently released survey.

The poll by Boston Consulting Group found that 31 percent of senior executives at large U.S.-based manufacturers indicated likely production expansions in the U.S., while 20 percent of those companies were likely to expand in China.

In the 2013 poll, China led with 30 percent compared to 26 percent that expected to add domestic production.

“These findings underscore how significantly U.S. attitudes toward manufacturing in America seem to have swung in just a few years,” said BCG’s Harold Sirkin. “The results offer the latest evidence that a revival of American manufacturing is underway.”

Represented companies were also reshoring jobs back to the U.S. at a 9 percent higher rate than one year ago. Since the BCG survey began in 2012, that number has increased by some 250 percent.

Although rising wages in China helped curb its manufacturing advantage compared to the U.S. in recent years, BCG also found that more companies are basing their decisions on “total cost” factors such as supply chain complexity, shipping costs and proximity to customers.

“There is good reason to believe that the cost-competitiveness of the U.S. compared with China and many other major export economies will continue to improve in the near term,” said BCG manufacturing practice co-leader Michael Zinser.

Three-quarters of respondents said that their companies would invest in advanced manufacturing technologies during the next five years, but they also expected reshoring to add jobs despite the growth in automation and robotics.

Half of companies expected reshoring to boost employment by at least 5 percent; 27 percent anticipated an increase of 10 percent or more.

The results, however, were slightly less optimistic than the 2014 poll, which BCG analysts attributed to issues both at home — including health care costs, regulations and rising wages — and globally, such as the collapse in energy prices and the strong dollar.

“Although interest in reshoring remains strong, this year’s findings indicate that a number of companies are still holding back,” said BCG partner Justin Rose.

A total of 263 senior-level executives responded to the 2015 online survey. Their companies had revenues of at least $1 billion and virtually all conducted operations both in the U.S. and overseas.

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