An increasing number of U.S. manufacturers say they’re considering reshoring or nearshoring more of their production or supply capacity since the COVID pandemic began in March, according to consecutive studies over the past several months by product sourcing company ThomasNet.
According to the latest survey released in June, which included nearly 750 qualified manufacturers, 69% said they were either “likely” or “extremely likely” to bring manufacturing production and sourcing back to North America, compared with 54% in February and 64% in a survey conducted earlier in May. Industry experts note that companies are typically reticent about discussing their individual supply chain strategies and potential reshoring initiatives for competitive reasons.
Jeff Kappen, an associate professor of management and international business at Drake University for the past eight years, said he’s talking a lot about both reshoring and nearshoring with his students, and the latest research shows clear trends. Kappen is also a consultant with Baton Global, a Des Moines firm that advises businesses on international trade.
“I think companies are generally trying to build multiple, flexible bases in various countries rather than basing everything out of China,” Kappen said. “I don’t think companies are looking at pulling completely from China — there’s just too much there. But they’re looking at pulling back.”
If there is a big early winner emerging as a nearshoring destination, it’s Vietnam, he said. “There has also been a pullback to Vietnam. That country has seen a lot of activity. I think Vietnam has been the big winner in Asia this year.”
Kappen said that two broad areas of manufacturing are likely to have the highest probability of success in reshoring sourcing or production.