Report: Reshoring Trend Could Be ‘Aberration’

A recent analysis suggests that the trend of reshoring to the U.S. could be over before it really began.

(AP Photo)
(AP Photo)

A recent analysis of manufacturing imports and domestic output suggests that the trend of reshoring to the U.S. could be over before it really began.

The U.S. Reshoring Index from consulting firm A.T. Kearney came in at minus-115 for 2015, which was down from minus-30 in 2014 and represents the largest year-to-year decline in 10 years.

In addition, A.T. Kearney anticipated just 60 reshoring cases in 2015 after more than 200 cases in each of the previous two years.

“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," said Patrick Van den Bossche, the study's co-author.

Analysts speculated that rising labor costs in China could lead U.S. manufacturers to consider restarting domestic production, but the A.T. Kearney report found that industries largely moved to lower-wage nations in Asia.

(AP Photo)(AP Photo)

U.S. imports from Vietnam alone — a key cog in negotiations over the Trans-Pacific Partnership — are expected to nearly triple between 2010 and 2015.

The analysis predicted that the TPP, if ratified, would continue to encourage offshoring in 2015, along with a strong dollar, low oil prices and a tight U.S. labor market.

Companies looking to return from Asia, the report added, could also elect to start production in Mexico.

"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," Van den Bossche said.

Foreign manufacturers, meanwhile, were more likely than American companies to consider investing in the U.S., the report found.

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