While reshoring of manufacturing from low-cost Asian countries has given a boost to U.S. manufacturers, it may be as much hype as reality, as imports from the region are still growing faster than U.S. production, a new study finds.
The study from management consultants A.T. Kearney noted that U.S. manufacturing production grew 6 percent a year from 2009 to 2013. But it also said that imported manufactured goods from Asia grew even faster, at 8 percent a year, during the same time frame.
“While the so-called reshoring trend has helped improve the mood of U.S. manufacturing since the Recession, the reality is that the import value of manufactured goods into the U.S. from 14 low-cost Asian countries has grown at an average of 8 percent per year in the last five years,” said study co-author and A.T. Kearney principal Pramod Gupta.
The study acknowledged limits in hard data on the topic, and did not look at Mexico as a reshoring destination, but it said that “the impact of reshoring on this turnaround [in U.S. manufacturing] is much less than the hype would indicate. Thus far the evidence has been largely anecdotal.”
The Dec. 15 study said reshoring is clearly happening, as manufacturers seek to mitigate rising costs in China, or they want more nimble responses from their supply chains, or they want to take advantage of more consumer interest in a “Made in the USA” label.
The study unveiled in A.T. Kearney's “Reshoring Index,” is what it said would be the first in a series of studies trying to look more objectively at the return of manufacturing to the U.S.
The A.T. Kearney analysts pointed to some industries, like apparel, where they admitted they were somewhat surprised that work was returning to the United States.
But in general, the study said it found little evidence to support the idea of large-scale reshoring — it said that in nine of the last 10 years, imports of manufactured goods grew faster than domestic manufacturing production.
It said that in the three years from 2011 to 2013, there was some evidence that U.S. manufacturing output was beginning to grow faster than imports. But it said early evidence in its index for 2014 show imports gaining ground again.
“This could be an indication that the impact of the reshoring wave is waning,” it said.