Corporate Executive Survey Commentary: No Mass Reshoring Trend
Although rising offshore costs are causing companies to choose U.S. over foreign locations for new investment, this has yet to result in a mass reshoring trend.
Q1 2014
The survey, as well as SSG’s experience, suggests that the majority of new projects are driven by an increase in demand for goods and services. Another common trend is that corporate projects, especially in the production and material-moving sectors, continue to become more capital-intensive and less labor-intensive.
These results help clarify a common misconception that new corporate investment in the U.S. by companies with a foreign presence is the “reshoring” of existing foreign operations. It is SSG’s experience that the rise in offshore costs is causing companies to choose the U.S. for new investment over foreign locations, but those costs haven’t risen to thresholds that have sparked a mass reshoring trend. However, this reshoring trend could become reality if cost structures keep increasing in the current fashion, but it is unclear when that would happen.
Regarding key location drivers, the availability of a qualified, productive, yet cost-effective work force will continue to be the most important factor when locating corporate investment. In addition to labor, most decision-makers will place a high priority on business environment factors that will have the greatest long-term impact on their operation, and will only use economic incentives to draw fine distinctions between short-list communities that can adequately support their business.
By all accounts, most industries will continue to experience positive growth over the next couple of years, and it will be interesting to see the opportunities that arise.
Project Announcements
Northern Ireland-Based Almac Group Expands Montgomery County, Pennsylvania, North American Headquarters
07/05/2022
Precision Planting Plans Morton, Illinois, Operations Center
07/05/2022
HHO Carbon Clean Systems Plans McCracken County, Kentucky, Production Plant
07/05/2022
Toast Establishes Nashville, Tennessee, Configuration Complex
07/05/2022
H-E-B Expands Temple, Texas, Distribution Operations
07/05/2022
Peerless Products Establishes Nevada, Missouri, Facility
07/02/2022
Most Read
-
Area Development’s 17th Annual Shovel Awards Recognize State and Local Economic Development Efforts — First Two Platinum Shovels Awarded
Q2 2022
-
In Focus: Demand for Industrial Land Surges
Q2 2022
-
The 2021 Top States for Doing Business Reflect Their Locational Advantages
Q3 2021
-
Five Ways for Manufacturers to Manage Global Market Volatility
Q2 2022
-
36th Annual Corporate Survey: Executives Focus on Labor, Energy, Shipping Costs
Q1 2022
-
The Evolution of the Megasite
Q2 2022
-
Putting Your Best Foot Forward: Presentation of Incentives Information to the Media
Q2 2022