U.S. manufacturers last year moved their operations offshore far more than they returned from overseas, according to a recent analysis.
Consulting firm A.T. Kearney tabbed its U.S. Reshoring Index — which contrasts manufactured goods imports and U.S. manufacturing output — at minus-115 in 2015.
Last year's index is down sharply from the minus-30 level in 2014 and represents the largest year-over-year decline in the past decade. A.T. Kearney analysts predicted 60 reshoring cases last year, compared to more than 200 cases in 2013 and 2014.
"The 2015 data confirms that offshoring seems only to be gathering steam, while the U.S. reshoring train that so many predicted has yet to leave the station," said study co-author Patrick Van den Bossche.
Rising labor costs in China in recent years led to predictions that manufacturers would return to the U.S. in order to alleviate transportation costs and complex supply chains.
Instead, the analysis found that industries successfully relocated from China to lower-wage Asian nations — namely Vietnam — despite poorer infrastructure. U.S. imports from Vietnam are set to nearly triple in 2015 compared to 2010 levels.
The report also suggested that even if manufacturers elect to return from Asia, they could choose to set up shop in Mexico rather than the U.S.
Vietnam, Mexico and the U.S. are among the nations involved in the proposed Trans-Pacific Partnership.
The A.T. Kearney report suggested that ratification of the TPP, along with a strong dollar, low oil prices and a tight labor market, would encourage further offshoring in 2016.
“The U.S. reshoring phenomenon, once viewed by many as the leading edge of a decisive shift in global manufacturing, may actually have been just a one-off aberration," Van den Bossche said.
The report, by contrast, found that foreign manufacturers — including those in China — are the most interested in investing in the U.S., largely due to its strong consumer market and manufacturing expertise.