Move to reshore production from Asia to North America accelerates
Just 4% of US CEOs are not considering reshoring in any format finds Kearney’s 10th Reshoring Index
Kearney’s 2022 Reshoring Index has found that 96% of US CEOs are in the process of reshoring, have already reshored or are considering the feasibility of doing so, an increase of 18% since 2022.
This marks an acceleration in the reshoring trend that has been growing since the Trump administration brought in more punitive trade policies and that was then boosted by the pandemic’s dislocation of global supply chains.
Kearney said in its report that “more than 80% of companies across almost all industries are now on a path to reshore at least part of their manufacturing operations in the next three years.”
This has increased the share of American made goods, as the report’s analysis estimated that in 2022 US manufacturing growth outpaced imports from the 14 low-cost Asia-Pacific countries and regions indexed for the first time since 2019.
It is not just the US that is benefitting, with major growth in a variety of well-positioned countries, often at the expense of China.
American imports of goods manufactured in Mexico have grown from $320bn to $402bn since the start of the COVID-19 pandemic in 2019, which represents at 26% jump. Indeed, Chinese companies have also moved their manufacturing operations to Mexico to be closer to the US market.
Further afield from the US, authors expect Vietnam, Taiwan and India to continue to reap the benefits of global repositioning of supply chains.
This aligns with Reuters Events, Supply Chain research, which found that the most attractive countries to reposition sourcing and manufacturing operations to were India and Vietnam.
Access to increasingly affordable automation, as well as attractive policies from the US government have also fired up the reshoring trend.
Omar Troncoso, partner in Kearney’s Consumer and Retail Practice, said: “We seem to be heading toward a sustained reshoring movement. Reshoring is becoming both a cause and an effect of companies significantly rethinking how they construct and operate a supply chain that will carry them forward into the next decade.”