Manufacturing Savvy

Reshoring is Not a Trend

So says Michael Heilala of Accenture at the EM Roundtable in the Rockies.  Heilala, who as senior principal of the Global Manufacturing Strategic practice at the consulting firm, pointed out that in a “few short years reshoring has evolved from something companies use to talk about to something they are doing."

He discussed key trends as to why this is happening:

The developing world has new consumers thus increasing overall demand. “The growing consumer class in developing countries will have a tremendous impact on manufacturing, “ Heilala explains.

Both the economic and political climate works in favor of reshoring. One economic factor is the increase in wages in China. The prediction is that over the next 3-5 years wages will reach $6 an hour, which for China is huge. This makes the U.S. labor market look more attractive.  

An example of a political issue is the security threat in Mexico that has companies moving back to the U.S.

The availability of both cheap and abundant energy in the U.S. is a major factor driving companies to come back home. “The forecast of U.S energy supply and costs has never been brighter,” says Heilala.  

“The U.S. dollar continues to weaken against other currencies due to federal economic policy,” adds Heilala. “This bodes well for domestic growth.  

For more information see Accenture’s : Made in America: Rethinking the Future of US Manufacturing”

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