Survey: Manufacturers see North America as top expansion spot
Industrial Distribution staff -- Industrial Distribution, 6/18/2008 1:38:00 PM EDT
Manufacturers consider North America to be the most desirable region for expansion over the next three years, according to a survey by business services provider Deloitte .
The firm's Made in North America report indicates that manufacturing companies with operations in North America plan to expand their businesses here. Over the short term, the continent is the most desirable possibility for expansion.
“While globalization will continue and some manufacturing jobs will follow, North America is showing significant resiliency,” Deloitte vice chairman Craig Giffi said. “While the focus on expanding both production capacity and sales and service in North America, China and India may seem like a contradiction, it is evidence of the fact that to compete in the future, manufacturers need to be able to grow in all major markets around the world.”
The survey, made in conjunction with the National Assn. of Manufacturers and its Manufacturing Institute and Canadian Manufacturers & Exporters, polled 321 North American manufacturing executives.
In the United States, 76 percent of respondents said they plan to beef up their sales and services operations; 49 percent said they would seek more U.S. raw materials and parts sourcing; and 44 percent said they would ramp up production in their American operations.
However, when asked about the impact of the 15-year-old North American Free Trade Agreement (NAFTA), 61 percent said they expect North America to become less competitive against other regions as a site for production by 2012.
That’s due to higher labor costs (cited by 71 percent), tax policy (66 percent), work rules (66 percent), lack of skilled labor (51 percent) and the energy and raw materials costs (56 percent).
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