U.S. companies increasingly feel political pressure to save U.S. jobs by manufacturing in the United States instead of in low-cost locations like China, according to a quarterly survey.
The survey by AMR Research, a market research firm focused on the global supply chain, found 10 percent of U.S.-based manufacturers consider political pressure the primary reason to manufacture in the United States, up from 4 percent that said so in November.
Part of the shift can be attributed to the recent government stimulus package, which comes with "strings attached" to save or create U.S. jobs, said Noha Tohamy, AMR vice president of research.
"With the Obama Administration, there is more awareness about the need to bring jobs back," she said.
"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."
Tohamy cited the example of Intel Corp, which said last month it would invest $7 billion over two years to build next-generation chip manufacturing plants.
Meanwhile, Mexico, Canada and Brazil stand to benefit from a trend toward "near-shoring," or setting up operations close to the U.S. home market, Tohamy said.
The number of companies planning to increase such activity is five times higher than those expecting a decrease, according to AMR’s survey, which includes responses from about 140 companies. The "blind" survey did not identify respondents.
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 said.
Product quality failures remain among the top risks to the supply chain, but more manufacturers now consider the slump in consumer spending to be their biggest worry.
Thirty-seven percent of respondents identified lower consumer spending in the United States as the top risk. Only 15 percent expect this risk to decrease by next year, according to AMR, which works on supply chain issues with companies like Procter & Gamble Co , Boeing Co, and Cisco Systems Inc.
