By John Brandt
President Barack Obama recently encouraged American manufacturers to bring production back to the United States, promising new tax proposals to encourage “insourcing.” That’s a lot of potential insourcing — because the vast majority of manufacturing plants import material and/or components from outside their home countries.
In fact, 75% of U.S. and international plants in the 2011 MPI Manufacturing Study import goods from other countries, representing 10% (median) of their material and components (as a percentage of dollar volume). Among the U.S. plants in the study, 76% import from outside the United States, representing 8% (median) of material and components.
China is the source of choice for outsourcing; 59% of plants imported materials and components from China in 2011, importing 2% (median) of material and components. Among U.S. plants, 56% import from China, for 1% (median) of their material and components.
Global trade is a two-way route: Approximately 75% of plants sold overseas in 2011, selling 7% (median) of their total dollar volume overseas. Similarly among U.S. plants, 75% sell overseas, for 5% of total dollar volume sales.
All plants | U.S. plants | International plants | |
| Imported material/components (% of dollar volume purchased outside home country) |
|
|
|
| Median | 10.0% | 8.0% | 25.0% |
| Average | 20.9% | 15.7% | 36.8% |
| Imported material/components from China (% of dollar volume from China) |
|
|
|
| Median | 2.0% | 1.0% | 4.3% |
| Average | 11.1% | 8.6% | 18.5% |
| Overseas sales (as % of total dollar volume) |
|
|
|
| Median | 7.0% | 5.0% | 13.0% |
| Average | 17.8% | 13.3% | 30.5% |
How well-connected is your firm with global suppliers and customers? And would tax incentives change your strategy?
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Contact The MPI Group to learn more about the 2011 MPI Manufacturing Study findings and the
©2011 Next Generation Manufacturing Study findings.
