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KSM Blog | Katz, Sapper & Miller CPA

Top Reasons for Moving Production Back to the United States

Posted 3:54 PM by

While the U.S. economy as a whole has struggled the past few years, manufacturing in the United States is starting to see some gains. Most of these gains are as a result of re-shoring jobs back to the United States that had previously been moved overseas for cheaper labor. 

Research by the Boston Consulting Group shows that increased cost of labor, increased natural gas costs, and increased electric costs have companies considering moving or actually moving production from Europe and Japan back to the United States.

Research conducted by Capital Business Credit shows that half of respondents polled are considering moving jobs back to the United States that had been moved over to China in prior years, with 30% of those respondents noting the United States as their top choice for relocation. The top reason sighted for the potential moves was the increase in labor costs in China. The increase in transportation costs to ship products back to the United States once completed was sighted as the second reason.

Additionally, a survey report from the Council of Supply Chain Management Professionals show that 40% of the companies they surveyed planned to move production from China and India back to the United States. This report noted that increases in energy costs, labor costs and transportation costs were driving factors. The report also noted that companies had concerns over the political stability of these countries, as well as product quality and their ability to protect their intellectual property.

About the Author
Justin Hayes is a director in Katz, Sapper & Miller’s Audit and Assurance Services Group. Justin works with clients to help ensure accurate financial reporting, keeping an eye on their bottom line, helping them avoid risk and maximize efficiencies. Connect with him on LinkedIn.

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Comments (1)
transportation factoring wrote
Hmm so these are the reasons for moving production back to the United States. Thanks for sharing!!
Posted Jun 5 2013 7:32 AM
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