Products emblazoned with the tag “Made in China” are more than commonplace- it’s an assumption. Manufacturing trends have been continually outsourced to countries with larger, and often cheaper labor forces, such as China and India. Now, however, many business owners are choosing to bring production back to the U.S. Vreeland specializes in New Jersey Manufacturing Insurance.
According to Bloomberg Businessweek, as costs in China rise and owners reexamine their business plans, many small companies have determined that manufacturing overseas simply isn’t worth the trouble. A poll of 259 U.S. contract manufacturers which make goods for other companies showed 40% of respondents benefited this year from work that was previously completed abroad.
Manufacturing overseas presents numerous difficulties, especially for smaller businesses. Shipments could get stuck in customs. Changes and tweaks in products are difficult to communicate over the phone. Manufacturing in the U.S. cuts down on freight and shipping costs significantly. And businesses have more control over the product, being able to make adjustments, and monitor the quality of inventories easier, and with much less hassle. There is even the simple communication and logistical difficulties of manufacturing in a country that is twelve time zones away.
Economic factors could be affecting the shift as well. In a new report Workforce Rising: Why U.S. Manufacturing is Poised for a Comeback by Reynders McVeigh Capital Management the struggling economy could affect business owner’s decisions:
“Signs indicate, however, that U.S. companies are feeling pressure based on high unemployment, historically high profit margins, and historically low labor costs. It is simply becoming harder for companies to justify moving jobs offshore.”
There are a few trends, according to CNN Money. Products that are labor intensive such as apparel and textiles will likely continue being made overseas. Automakers such as GM have pledged to invest $2.5 billion in U.S. factories and retain domestic work. Domestic energy production has seen a boom in the U.S. And a higher demand for U.S. engineers, software developers, researchers, and consultants helps keep manufacturing in the U.S. The strongest reports can from subsectors such as heavy equipment manufacturing and steel, according to CoStar.
Any enterprise in the manufacturing industry faces serious risks. At Vreeland Insurance, we can help you minimize your risks with a strong, affordably priced insurance plan. Our New Jersey manufacturing insurance program is designed to meet the insurance needs of metal goods manufacturers, metal finishers, machine shops, even granite counter-top manufacturing and allied businesses throughout New Jersey. Contact us today for more information about our New Jersey manufacturing insurance program.