Survey indicates manufacturing work returning to U.S.

December 16, 2011

A survey of manufacturing executives conducted by Cook Associates Executive Search, showed that 85 percent of these individuals see the possibility of certain manufacturing operations returning to the U.S., according to a release.

The survey indicated that 37 percent of these executives cited overseas costs as a major factor, 19 percent noted that logistics issues were involved and 36 percent stipulated other reasons that included economic/political issues, quality and safety concerns, patriotism and overseas skills shortages for specific manufacturing positions.

The survey results came from a poll of nearly 3,000 manufacturing executives primarily in small- to mid-sized U.S. companies during the period of October 13 through November 18.

The manufacturing positions that were thought to be moving back to the U.S. consisted of low-volume, high-precision, high-mix operations, automated manufacturing and engineered products requiring technology improvements or innovation.

Kevin Logterman, managing director of Industrial and Family Business for Cook, noted that the respondents said the increased manufacturing in the U.S. would create demand for engineering, product development, operations and finance positions in the future.

The executives also pointed to the issue of cost, which had been the primary driver for moving manufacturing operations abroad, is now seen as a motivating factor for bringing work back home.

Cook noted "executives told us that because logistics are complex to begin with, the financial argument has to be compelling and the dynamics are changing."

Customer service and quality were two things that the executives thought were better managed in the U.S., according to the survey. Cook noted that the managers said " skill sets for certain manufacturing functions are not readily available overseas — China and Asia generally are unable to meet the demand for skilled workers."

This survey was released as manufacturing data was reported by the Philadelphia and New York branches of the Federal Reserve Bank that showed big jumps in manufacturing for the associated regions, The Associated Press reported.

Manufacturing in the Philadelphia region expanded for the third straight month, and the outlook for growth over the next six months also continues to improve for the area that includes Eastern Pennsylvania, South New Jersey and Delaware, according to the Philadelphia Inquirer.

"All of the broad indicators remained positive and suggest a modest expansion of activity," the Philadelphia branch of the Fed said in a statement about its survey, according to the newspaper.