Manufacturers plan to bring production back onshore

NEW YORK – More than half of manufacturers are ‘likely to extremely likely’ to bring production and sourcing back to North America as a result of the coronavirus pandemic. Additionally, 47 percent of U.S manufacturers report they are now seeking domestic sources of supply.

“It’s encouraging to see that many North American companies are forging ahead and seeking solutions including turning toward domestic sources of supply, a trend which will help shape the next wave of manufacturing,” said Tony Uphoff, president and CEO of Thomas, which commissioned the survey.

While February’s survey results reported that 60 percent of manufacturers are being impacted, March survey results reveal that only 45 percent of manufacturers say they are being affected, specifically by disrupted shipping and logistics (42 percent) and by offshore factory suspension or production restrictions (36 percent).

When asked what materials were needed to stabilize supply and keep production on schedule, manufacturers report:

• • fabricated materials (machined, stamped, extruded or molded material) at 41 percent
  • metals (steel, aluminum) at 30 percent
  • electrical or electronic components at 30 percent
  • raw materials (paper, wood, textiles) at 26 percent
  • machining tools and parts (fasteners, bearings, cutting bits, abrasives) at 21 percent

More than 50 percent (52)of manufacturers report the recent fluctuations in oil prices will affect business. Many respondents said that this will have a positive impact, noting the shifts will cause a reduction in transport costs and in prices for raw materials such as plastic.

Over half (55 percent) of manufacturers expect their revenue to decline as a result of the coronavirus, and 31 percent expect it to remain the same. This is a stark departure from February survey results, which found that only 34 percent anticipated their revenue to decline and 53 percent expected it to remain the same.

The study was conducted online using Qualtrics. As a follow up to the February 2020 survey, the March 2020 survey polled over 1,073 North American suppliers with revenues spanning from less than 4.9 million to over $500 million.