A new business trend among American manufacturers is to move factories back to the U.S. According to a survey released by Accenture, about two-thirds of domestic businesses have moved their plants to other locations during the past two years. Many of those moves were to back home.
Accenture’s managing director of manufacturing practice, Rich Bergmann, told Financial Times many survey respondents mentioned moving factories back to the U.S. because of freight issues and to increase the speed of fulfilling orders.
“There is evidence here of reshoring because of transportation costs and lead times,” Bergmann said. “The global supply chain allows you to chase lower cost of labor, but the total costs are reflected in the decision on where you produce for a given geography.”
Mega-manufacturers such as Caterpillar (NYSE:CAT) and General Electric (NYSE:GE) are just two examples of companies expanding existing U.S. operations. Caterpillar plans to add at about 1,400 jobs in Georgia next year, and GE also made known its intentions to conduct more of its manufacturing in the U.S.
Manufacturing giants aren’t the only companies deciding to move more business and jobs back to the U.S. North-Carolina-based Stanley Furniture (NASDAQ:STLY) recently moved its crib manufacturing arm back to the U.S.
Evidence that many consumers have more confidence in the quality of products made the U.S. prompted Stanley to open two more domestic plants and invest more than $8 million in machinery, according to The Wall Street Journal. The move has paid off for the company, which attributes some of its success to a variety of safety recalls on imported cribs.
“Will the consumer pay for ‘safer’ furniture for their child? We think so,” Stanley CEO Glenn Prillaman told WSJ. “We let people imagine: This is American made, versus China made. All the things they have heard about dog food, cribs — we let the consumer come to that on their own,” Prillaman continued.
In a separate WSJ report, Harry Moser, president of the Reshoring Initiative — a nonprofit campaign to bring back manufacturing jobs — said about 25,000 manufacturing and related jobs have returned to the U.S. in recent years.