United States companies are lately feeling more and more pressure to help save jobs.
One way some companies are doing this it by manufacturing products in the United States instead of turning to low-cost options like China. A recent survey by AMR Research found that 10 percent of U.S.-based manufacturers consider political pressure a primary reason to manufacture in the country, an increase of 4 percent since November 2008.
According to an article by Reuters, part of that shift can be attributed to the recent passage of the American Recovery and Reinvestment Act, which comes with the stipulation of saving or creating jobs in America.
“With the Obama Administration, there is more awareness about the need to bring jobs back,” Noha Tohamy, AMR vice president of research, said in the article. “This is driving some global companies to look at their sourcing strategy, and instead of going for low-cost countries like China, they are starting to either bring jobs back home to the U.S. or closer, to places like Mexico and Brazil.”
For instance, Intel Corp said last month that it would invest $7 billion during the next two years to build next-generation chip manufacturing plants. At the same time, Mexico, Canada and Brazil may benefit from the trend of “near-shoring,” or bringing operations closer to America.
The survey found the number of companies planning to increase such activity is five times higher than those expecting a decrease. Companies looking at their supply chain have to consider not just the direct cost of operations but also political factors and issues like product safety and failure rates, Tohamy added.
Product quality failures remain among the top risks to the supply chain, but more manufacturers now consider the slump in consumer spending their biggest worry. Of they survey respondents, 37 percent said they identified lower consumer spending as the top risk, while only 15 percent expect the risk to decrease by next year.
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