by Mary Rooney, KC SmartPort
Many US businesses are evaluating reshoring and nearshoring production activities to increase flexibility and resilience in their operations. Increased interest in bringing production facilities closer to American shores has been driven mainly by recent global supply chain challenges that have resulted in major delays, increased costs and overall instability.
A survey from ABB found that 70% of US businesses are planning changes in their operations, with 37% planning to bring production back home and 33% looking to nearshore and shift their operations to a closer location. The survey also found that demand for increased automation is increasing due to the need for flexibility in the supply chain, as workforce and labor shortages continue.
According to data from the Thomas Report State of North American Manufacturing 2021 Annual Report, 83% of manufacturers are likely or extremely likely to reshore jobs, up from only 54% in March 2020, before the pandemic was a factor.
There are signs many businesses are already taking action. The construction of new manufacturing facilities in the US has increased 116% over the past year, compared to the 10% gain on all building projects combined, according to Dodge Construction Network.
(Editor’s note: This is another significant way manufacturers are stemming supply chain challenges.)