Increased Raw Materials, Logistics, Financing Pushing Manufacturers Out of China

April 12, 2012
50% of U.S. importers surveyed have moved some of their manufacturing outside of China, new study reports.

Obtaining financing in China is getting more difficult and causing manufacturers to pick up and move.

"While China will continue to be the dominant player when it comes to the manufacturing of goods sold in the U.S. there is an interesting shift that is occurring," said Andrew Tananbaum, executive chairman of Capital Business Credit. "The lending environment combined with a number of other factors including cost of labor, raw materials and logistics have made manufacturing in other countries- most importantly the U.S. more attractive.

As the American economy continues to recover, and retail sales continue to improve, the manufacturer/importer relationship will be critical in ensuring that enough goods are made and shipped to keep store shelves stocked."

According to a study from Tananbaum's group, "Global Retail Manufacturers and Importers Survey", 50% of U.S.-based importers have moved some of their manufacturing outside of China and a third (34.2%) are considering moving manufacturing outside of the continent.

Importers who sell to major American retailers report that they have or have plans to move a portion of their manufacturing outside of China due to increased costs of raw materials and logistics, as well as the difficulties China-based factories face in obtaining financing.

When asked which countries manufacturing is being moved to, Vietnam was most popular at 33.3% and the U.S. was also cited as a top choice at 27.8%.

Other countries that are popular manufacturing destinations include Pakistan (22.2%) and Bangladesh (16.7%).

The Global Retail Manufacturers and Importers Survey, conducted by Capital Business Credit polled more than 50 manufacturers and importers. The survey was conducted during the week of February 27, 2012. Respondents consisted of manufacturers and importers in the apparel, housewares, home furnishings, fashion accessories and furniture industries.

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