- US imports from 14 Asian low-cost countries and regions
decline by $143 billion
- Mainland Chinese imports decline by 20 percent, or
$105 billion
- Imports from Canada
increase steadily for the past three years
- Mexico surpassed
mainland China as largest exporter
to the US for the first time since 2013, increasing by 32 percent
since pre-pandemic
- Mainland China reroutes
its exports to other Asian countries and regions from which the US
imports; Vietnam is reshuffle's
biggest winner
- US consumers are starting to "buy American," with rates
increasing 5 percent between 2022 and 2023
- US hurdles include severe lack of skilled workers, labor
costs, and infrastructure challenges
CHICAGO, April 24,
2024 /PRNewswire/ -- Today, global management
consultancy Kearney released its
11th annual Reshoring Index, a unique barometer tracking the extent
to which America is reshoring manufacturing after decades of
offshoring. This year's report, Made in America: Here to
stay?, focuses primarily on import and export flows between
the US and 14 Asian low-cost countries and regions (LCCRs),
including mainland China, as well
as import trends with Canada and
Mexico. The 2024 Kearney Reshoring
Index finds a US market increasingly importing goods made closer to
home and less on goods from LCCRs, continuing trends that have been
set in motion over the past few years.
"While it sounds like an election year bumper sticker, the
phrase 'Made in America, for America' could describe the
foreseeable future of industrial manufacturing in the Western
hemisphere," noted Patrick Van den
Bossche, partner and lead author of the annual Reshoring
Index report. "However, that doesn't mean mainland China and other producer nations are sitting
idly by as more and more nearshored goods flow into the US market.
Our research shows an emerging correlation between the uptick in US
imports from Asian LCCRs other than mainland China and the rise in imports these countries
see from mainland China. Mainland
China is now running trade
surpluses with Vietnam,
India, and Thailand, which in turn are running widening
surpluses with the US."
The Index shows that American, Canadian, and Mexican nearshored
and reshored industrial production efforts continue to take market
share away from Asian manufacturers, including mainland
China. US imports from 14 Asian
LCCRs declined from $1.022 billion in
2022 to $878 billion in 2023, while
domestic manufacturing gross output (MGO) stayed essentially flat.
While the majority of the drop in Asian LCCR imports was caused by
a whopping 20 percent reduction in Chinese imports, for the first
time since the inaugural 2013 Reshoring Index, some Asian LCCRs
other than mainland China,
including Vietnam and Malaysia, also saw a dip in imports.
The report found that imports from Canada have steadily increased since the
pandemic, keeping pace with Asian LCCR imports. South-of-the-border
trends detailed in Kearney's 2023
report also continued and expanded in the new Index. Last year, for
the first time since 2013, Mexico
surpassed mainland China as the
largest exporter to the US. Mexican manufactured goods imported
into the US grew by 32 percent, from $320
billion to $422 billion, since
the pre-COVID period.
"US investments in reshoring remain strong, but despite
receiving considerable support from both the private and public
sectors, domestic manufacturing still faces considerable hurdles,
including a lack of skilled workers, labor costs, and
infrastructure challenges," noted Mexico-based Omar
Troncoso, a partner in Kearney's consumer and retail practice and
co-author of the Index. "Our research nonetheless shows that the
vast majority of leaders looking to bring their manufacturing
operations closer to the domestic market are considering the US.
This year's peaking Reshoring Index shows strong continued interest
from CEOs in reshoring and nearshoring activities, underscoring
what now appears to be a decisive shift in strategic business
operations toward manufacturing products closer to the US domestic
market. In addition, mainland China's growing presence in Mexico is testimony to mainland China's intent to remain a fixture in the US
imports picture."
Added Patrick Van den Bossche,
"That said, US companies and consumers are starting to truly 'buy
American,' as shown by our US self-sufficiency index (SSI), which
tracks how what's made in the United
States for the US market compares against what's imported
and stays in the US market." The SSI gradually declined from 2013
to 2020 but started flipping modestly in 2021 and increased by 5
percent between 2022 and 2023.
The movement of making goods for the US market closer to that
market is now well established and strong continued interest from
CEOs and their stakeholders in reshoring activities underscores
what now appears to be a decisive shift in strategic business
operations toward repatriating manufacturing to the United States. To echo the popular song,
"Born in the USA" seems to be
taking hold.
Read the full report here.
US Media Contact:
MKPR/Meir Kahtan
+1 917-864-0800
mkahtan@rcn.com
About the Kearney Reshoring Index
Launched in 2013, the Kearney Reshoring Index is a unique
barometer for tracking the extent to which America is reshoring
manufacturing back from Asian countries that have benefitted for
decades from US companies offshoring their manufacturing
operations. The Reshoring Index is determined by dividing the
import of manufactured goods from the 14 Asian LCCRs by the US
domestic gross manufacturing output to calculate a manufacturing
import ratio (MIR). The Reshoring Index reflects the year-on-year
change in the MIR.
About Kearney
Kearney is a leading global
management consulting firm. For nearly 100 years, we have been a
trusted advisor to C-suites, government bodies, and nonprofit
organizations. Our people make us who we are. Driven to be the
difference between a big idea and making it happen, we work
alongside our clients to regenerate their businesses to create a
future that works for everyone. www.kearney.com.
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SOURCE Kearney