According to a report by AlixPartners, a business advisory firm, America is becoming more competitive in terms of manufacturing and will match China on the cost of manufacturing within two years. Their research reveals that, according to current trends such as wage inflation in China and exchange rates that impact total costs of bringing a product to its point-of-sale, the United States is on track to achieve cost parity with China as a base for manufacturing operations by the year 2015.
In other words, they report that, on average, manufacturing an item in the US to be sold domestically will cost the same amount as manufacturing it in China and shipping it back to the US.
In a recent survey the company conducted of 137 top manufacturing executives in the US across a range of 10 different industries, 37% of the executives said they would choose the US as their preferred location for manufacturing; an equal percentage of respondents cited Mexico as the most attractive nearshoring locale. In last year’s survey, 49% of the executives chose Mexico as their preferred base, while 36% chose the US.
With a resounding 84% of the C-level executives surveyed saying that the decision to nearshore their manufacturing would be an important one during the next year, versus 53% who said the same last year, it is clear that nearshoring and reshoring decisions are moving to the “front burner” in 2013.