C-Level Executive Survey: U.S. On Par with Mexico as a Preferred Nearshoring Destination
The report includes a survey of C-level executives from across more than 10 manufacturing-related industries, and 37 percent of the respondents cite the U.S. as the preferred nearshoring spot, the same percentage that prefer Mexico.
Q2 / Spring 2013
The report includes a survey of C-level executives from across more than 10 manufacturing-related industries, and 37 percent of the respondents cite the U.S. as the preferred nearshoring spot, the same percentage that prefer Mexico. Just about half of the respondents now see nearshoring as an opportunity for serving domestic demand — and of those respondents, a third are already in the process of nearshoring, while another 57 percent expect they will be within three years.
The AlixPartners report warns that it would be a mistake to take a broad-brush approach and consider the U.S. as the most competitive bet for all products. The equation is different, for example, depending on whether you’re making fabricated parts, consumer products or assemblies. And at the moment, the total landed costs for each of those product types remain lower in Mexico, China, and India than in the United States.
With regard to China, AlixPartners notes that its exchange rate has been strengthening against the dollar since 2005. If that trend continues, along with typical wage inflation trends and the expected increase in ocean freight costs, China’s landed cost will be approaching parity with America’s by 2015. Mexico and India will, however, still be cost-competitive, according to AlixPartners. And beyond the question of costs, China still has labor and plant capacity and an industrial policy rich in training and incentives. Skilled manufacturing labor is not always as easy to come by in the U.S., and companies here would need plants and equipment again if they want to bring manufacturing back home. The bottom line, says AlixPartners, “Companies should look twice before they leap.”
Project Announcements
Duluth Trading Company Plans Adairsville, Georgia, Distribution-Fulfillment Center
08/12/2022
Oldcastle APG Establishes Suffolk, Virginia, Manufacturing Complex
08/12/2022
Milwaukee Tool Opens West Bend, Wisconsin, Manufacturing Plant
08/12/2022
LP Building Solutions Expands Sagola Township, Michigan, Operations Complex
08/12/2022
WebstaurantStore Establishes Ellabell, Georgia, Distribution Hub
08/11/2022
Skilcraft Expands Boone County, Kentucky, Operations
08/11/2022
Most Read
-
In Focus: “Golden Age” of Spec Development
Q3 2022
-
Area Development’s 17th Annual Shovel Awards Recognize State and Local Economic Development Efforts — First Two Platinum Shovels Awarded
Q2 2022
-
The 2021 Top States for Doing Business Reflect Their Locational Advantages
Q3 2021
-
In Focus: Demand for Industrial Land Surges
Q2 2022
-
Explosive Growth of Life Sciences Sector Comes with Challenges
Q3 2022
-
36th Annual Corporate Survey: Executives Focus on Labor, Energy, Shipping Costs
Q1 2022
-
Using Robust Project Controls to Enhance Project Management
Q3 2022