Reshoring of Manufacturing, Bringing jobs Back to the USA - Remke Blog

For more than 50 years, Remke Industries has been manufacturing our line of cord grips & molded connectors in the Chicago suburbs.  We’re proud to use the MADE IN USA symbol, glad to support organizations like the Made In America Movement and are thrilled to see the Reshoring movement growing stronger.

Reshoring is all about US companies that outsource manufacturing to China finding that it makes more sense to return jobs & production home to our shores.  We’ve been reporting on this trend in our blog since December 2011 and thought it was time for an update.

China’s competitiveness as a global low-cost production base is waning.  This is mostly because labor costs are rising while subsidies and other forms of support from the Chinese government are sinking.  Labor costs (e.g. higher wages) have shot up by as much as 500% in China since the year 2000.  In line with the changing expectations of Chinese factory workers, the average annual urban income almost doubled from 2007 to 2011.  Boston Consulting Group predicts that ongoing trends could “virtually close the price gap” for most products sold in the US within a couple of years.

“Within five years, the total cost of production for many products will be only about 10 to 15 percent less in Chinese coastal cities than in some parts of the US where factories are likely to be built.  Factor in shipping, inventory costs and other considerations and for many goods destined or the North American market – the cost gap between sourcing in China and manufacturing in the US will be minimal” the BCG wrote in 2011.

Harry C. Moser, founder & president of the US-based Reshoring Initiative, said in a recent report that the number of manufacturing jobs offshored from the US grew by 100,000 to 150,000 annually from 2000 to 2008 compared with about 2000 a year that reshored.  But that equation has since changed dramatically to between 30,000 and 50,000 jobs a year being offshored versus 30,000 a year that are reshoring.  It would seem we now have a growing sense of equilibrium.  “New offshoring is down 70 to 80% and new reshoring is up about 1500%” says Moser.

It is true that many, many companies are expanding their operations in China while others are thinking of moving their current or planned investments in China to a different country.  Hopefully the numbers for reshoring will continue to grow which would certainly help the US economy to recover and grow.

Do you know of companies who have reshored?  If not, we hope you will sooner vs. later.  Please SHARE & LIKE this blog and – as always – thank you for subscribing to EVERYTHING’S CONNECTED.