A.T. Kearney’s 2015 Reshoring Index Finds That Reshoring Is Failing To Keep Up With Off-Shoring

The second annual A.T. Kearney U.S. Reshoring Index demonstrates that actual reshoring of manufacturing operations to the United States has once again failed to keep pace with offshoring.

Since its release on December 21, several mischaracterizations of our Index have appeared in the press, some from organizations with a vested interest in promoting reshoring.

They incorrectly refer to the Reshoring Index as a ‘survey’ and chose to compare it to studies that measure executive sentiment regarding future reshoring trends.

We have a different methodology. Unlike other studies, the A.T. Kearney Reshoring Index is not surveying plans, speculations, intentions, or predictions, which may or may not materialize.

Instead, it is the result of a set of macroeconomic analyses of publicly available data. It’s intent is to push through the hype and look at what actually happened.

We invite readers to download the study, review our methodology and analysis, and decide for themselves.

The U.S. Reshoring Index compares the relative evolution of goods manufactured in the U.S. with those imported from 12 key Asian ‘offshore countries’ like China, Vietnam, etc.

For 2015, the Index dropped to -115, down from -30 in 2014, the largest year-over-year decrease in the last decade.  In addition, we look at all publicly reported reshoring announcements in a given year, to further substantiate our conclusions and noticed a significant drop as well.

Further detailed analyses, as outlined in the report, shows that U.S. imports from the ‘offshore countries’ grew at a faster rate than domestic manufacturing, and companies, in response to rising labor costs in China, are increasingly switching their sourcing decisions towards other Asian countries, rather than returning to the United States.

In our 2015 study, we agree that, on the whole, manufacturing in the U.S. is in decent shape.

However, we note that this is for a significant part due to increased Foreign Direct Investment and not reshoring, an important distinction that other studies often fail to make.

We invite those writing about our Index and the accompanying study to reflect our methodology and conclusions accurately before comparing it to surveys which evaluate sentiment rather than data.

Editors Note
Patrick Van den Bossche and Pramod Gupta are both partners at global management consulting firm A.T. Kearney and co-authors of the A.T. Kearney U.S. Reshoring Index.

Rosemary Coates, President of Blue Silk Consulting, Argument: A.T. Kearney’s Study on Reshoring is Just Plain Wrong