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Made in America, AgainFourth Annual Survey of U.S.-Based Manufacturing Executives
December 2015
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Executive summaryKey takeaways from BCGs fourth annual survey of U.S.-based manufacturing executives
17% of respondents report actively reshoring production today
2.5x the number that were actively reshoring in 2012
More companies are moving from consideration to action
31% of executives would put new capacity to serve the U.S.
market in the U.S. versus 20% who would choose China
Significant reversal from two years ago, when China was
favored by 30% to 26%
Companies that are reshoring most often cite core cost
factorsshortening supply chains, reducing shipping costs
as biggest reasons
Access to a skilled workforce is also a key reason; 2.7x as
many respondents cite increased skilled labor as a driver for
moving production tothe U.S. compared with those who cite it
as a reason for offshoring fromthe U.S.
56% believe that decreasing costs in automation have
improved their product competitiveness
71% believe that advanced manufacturing technologies will
improve the economics of localized production
Executives who anticipate net job gains within the next five
years outweigh those predicting declines by a 2-to-1 margin
1
2
3
4
5
Interest in reshoring production to theU.S. remains strong, and the percentageof companies actively moving operationsback to the U.S. continues to increase
The U.S. has surpassed China and isoutpacing Mexico as the most likelydestination for new manufacturingcapacity to serve the U.S. market
Key drivers of expanding manufacturingcapacity in the U.S. include costs, accessto a skilled workforce, and increased localcontrol to drive quality and innovation
Investment in automation and otheradvanced manufacturing is seen as anopportunity to further drive efficiency andU.S. competitiveness
Prospects for job creation remain strong
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Survey methodology
Since2012, The Boston Consulting Group (BCG) has conducted an annual online survey of senior-
level, U.S.-based manufacturing executives. This years survey, conducted in September, elicited 263responses. The responses were limited to one per company.
Virtually all of the respondents work for companies that manufacture in the U.S. and overseas andmake products for both U.S. and non-U.S. consumption. Respondents are decision makers incompanies with more than $1 billion in annual revenues, across a wide range of industries, including:
Electronic and other electrical equipment andcomponents, except computer
Transportation equipment
Industry and commercial machinery
Fabricated metal products, except machinery
and transport
Chemicals
Rubber and plastics products
Primary metal industries
Food products
Computer equipment
Petroleum refining and related industries Apparel and other finished products made from
fabrics and similar material
Lumber and wood products, except furniture
Printed products
Stone, clay, glass, and concrete products
Furniture and fixtures
Paper and allied products
Textile mill products
Leather and leather products
Tobacco products
F M di U O l D N t R d M Th T Slid Ch t With t P i i
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Interest in reshoring production to the U.S. from Chinaremains strong, with a move from consideration to action
Sources: BCG Manufacturing Survey, February 2012, August 2013, August 2014, and September 2015Note: Numbers in the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: Given the fact that Chinaswage costs are expected to grow, do you expect your company will move manufacturing to the United States? Question asked only of companies that currently manufacture in China. N = 132.
7
13173
8
7
8
17 15
18
17 15
0
10
20
30
40
50
60
20152013
54
Yes, we will move production to the U.S. inthe next two years
Yes, we are actively considering doing this,although we have not made a final decision
Yes, we will consider doing this inthe near future
53
Yes, we are already actively doing this
Respondents (%)
37
2012
1
F M di U O l D N t R d M Th T Slid Ch t With t P i i
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The trend of year-over-year increases in companies activelyreshoring has continued
17
13
7
0
5
10
15
20
Respondents (%)
2013
+31%
2012 2015
Yes, we are already actively doing this
+88%
1
Sources: BCG Manufacturing Survey, February 2012, August 2013, August 2014, and September 2015Note: Numbers in the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: Given the fact that Chinaswage costs are expected to grow, do you expect your company will move manufacturing to the United States? Question asked only of companies that currently manufacture in China. N = 132.
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The U.S. has surpassed China and is outpacing Mexico asthe most likely destination for new manufacturing capacity
Sources: BCG Manufacturing Survey, February 2012, August 2013, August 2014, and September 2015Note:Numbers atop the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: In the next five years,how will the supply chain change for the products you intend to sell inside the U.S.? Allother destination countries accounted for 18% of responses in 2013, 26% of responses in 2014, and20% of responses in 2015.
2
30
26
20
31
0
10
20
30
40
10
+5
ChinaUnited States
20152013
2626
2931
0
10
20
30
40
+3+5
MexicoUnited States
Most l ikely dest inat ion for n ew manu facturing capacity to serve the U.S. market
Respondents (%)
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Companies that have reshored cite increased regional-ization, strong workforce and environment, and local control
76
70
64
57
66
63
55
52
14
18
22
23
16
19
25
30
10
13
15
20
18
18
20
18
0 20 40 60 80 100
Shorten our supply chain
Accelerate innovation andproduct development
Becloser to customers
Reduce shipping costs
Respondents (%)
Improve quality and yield
Provide local control overmanufacturing processes
Make it easier to do business
Access theskilled workforceand talent
Primary reasons formoving to U.S.
Source: BCG Manufacturing Survey, September 2015Note: Question asked: Why did your company move production to the U.S. from another country? Please select how much you agree or d isagree with each of the following reasons for change.
3
Strongly or somewhat disagreeStrongly or somewhat agree Neutral
Strong workforce andbusiness environment
Control over process,quality, and innovation
Benefits of increasedregionalization
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Manufacturers are 2.7x more likely to move production tothe U.S. than from the U.S. to access skilled labor
3
Source: BCG Manufacturing Survey, September 2015Note: Chart counts respondents who marked Strongly or somewhat agree. Numbers atop the bar charts have been rounded; percentage changes outside the bar charts are based on theactual numbers before rounding.1Question asked: Why did your company move production to another country from the U.S.? Please select how much you agree or d isagree with each of the following reasons for change.2Question asked: Why did your company move production to the U.S. from another country? Please select how much you agree or d isagree with each of the following reasons for change.
57
21
0
20
40
60
80
Production moved from the U.S.1
2.7x
Production moved to the U.S.2
Respondents (%) citing access to the skilled workforce and talent as a strong factor for moving production
Responses are consistent with the 2014 survey, in which 74% of respondents reportedmoving production to the U.S. to access skilled labor
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Executives plan to invest in automation or other advancedmanufacturing to enhance product competitiveness
56
71
75
31
23
16
13
6
10
0 20 40 60 80 100
Respondents (%)
Strongly or somewhat disagreeNeutralStrongly or somewhat agree
Decreasing automationcost improved my productcompetitiveness againstproducts sourced fromlow-cost countries
Manufacturing executivesbelieve automation andadvanced manufacturing willpromote the following:
Reduce costs and increase
their competitiveness
Allow them to benefit from
being closer to suppliers and
customers
Increase demand for highly
skilled workers
Source: BCG Manufacturing Survey, September 2015Note: Task stated: Please select how much you agree or disagree with each of the following reasons for change.N = 252.
4
Advanced manufacturingwill improve theeconomics of localizedproduction
The U.S. is stronglypositioned to benefit frommanufacturers that seek toincrease regionalization,especially as automation
costs decline
We will invest inadditional automation or
advanced manufacturingtechnologies in the nextfive years
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Twice as many executives expect trends to drive net growthin U.S. manufacturing jobs within five years
Source: BCG Manufacturing Survey, September 2015Note: Question asked: Based on current trends, what do you expect to happen to the number of manufacturing jobs in your company over the next five years?1Includes responses of less than +/-1% per year.
5
8%
19%
23%
26%
6%
3%
16%
30
20
10
0
Respondents (%)
Increase
by >20%
Increase by
10%-20%
Increase
by 5%-9%
FlatDecrease
by 5%-9%
Decrease
by 10%-20%
Decrease
by >20%
Job loss
50% of respondents
anticipate net job creation25% of respondents
anticipate net job losses
1
Job creat ion
Anticipated job creationoutweighs loss by a 2-to-1
margin
Anticipated job creation is still strong but slightly lower than last years 3:1 ratio of net
job creation to net job loss, due in part to global macro uncertainty (e.g., fx, growth)
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This research is part of BCGs ongoing series on the
shifting dynamics of global manufacturing
Authors of this researchHarold L. SirkinSenior Partner and coauthor ofThe U.S.
Manufacturing Renaissance: How Shifting Global
Economics Are Creating an American Comeback
(Knowledge@Wharton, November 2012)
BCG Chicago
Michael ZinserSenior Partner, coleader of the global Manufacturing
practice, and coauthor ofThe U.S. Manufacturing
Renaissance: How Shifting Global Economics Are
Creating an American Comeback
BCG Chicago
Justin RosePartner, leader of Industrial Goods Operations team in
the Americas, and coauthor ofThe U.S.
Manufacturing Renaissance: How Shifting GlobalEconomics Are Creating an American Comeback
BCG Chicago
Selected publications and
research in the seriesDespite a Strong Dollar, the U.S. Retains a Big ManufacturingCost Advantage over Europe, Japan, and Other DevelopedCountries(press release)
An analysis by The Boston Consulting Group, July 2015
How a Takeoff in Advanced Robotics Will Power the NextProductivity Surge(press release)
An analysisby The Boston Consulting Group, February 2015
The Shifting Economics of Global Manufacturing: How CostCompetitiveness Is Changing WorldwideA report by The Boston Consulting Group, August 2014
The U.S. Skills Gap: Could It Threaten a ManufacturingRenaissance?
A report by The Boston Consulting Group, August 2013
Behind the American Export Surge: The U.S. as One of theDeveloped Worlds Lowest-Cost Manufacturers
A report by The Boston Consulting Group, August 2013
U.S. Manufacturing Nears the Tipping Point: WhichIndustries, Why, and How Much?
A report by The Boston Consulting Group, March 2012
Made in America, Again: Why Manufacturing Will Return tothe U.S.
A report by The Boston Consulting Group, August 2011
Note: Most publications are available on BCGs thought leadership portal, www.bcgperspectives.com, or at www.bcg.com.
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