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Domestic manufacturing growth outlook appears strong
- March 8, 2005
- News Release
- Shop Management
The Site Selection Network of the National Association of Manufacturers (NAM) and Deloitte's Manufacturing Industry practice released the results of the organizations' joint 2005 Manufacturing Location Survey today at National Manufacturing Week. The survey found that more than 60 percent of respondents intend to expand their facilities in the next three years, and 70 percent of these expansion plans are expected to be domestic.
Completed by key corporate decision makers from more than 220 NAM member companies, the survey explored site selection market conditions and trends, as well as examined companies' location strategies and the primary objectives and factors that drive new location decisions.
Companies were asked if they have plans to locate or develop new operations within the next three years, as well as if these operations would reside domestically or abroad. The data showed that the majority of companies are expanding. Specifically:
- 63 percent of respondents plan to expand within the next three years.
- 70 percent of all expansion plans are domestic.
- 95 percent of large manufacturers (over 500 employees) plan to expand within the next three years, with an even split between domestic and non-US expansion plans.
- Small to mid-sized manufacturers plan to expand primarily within the US; however 20 percent intend to expand in non-U.S. markets as well.
Respondents indicated that fundamental business drivers remain the most critical issues to companies when making a location decision.
- When asked to name primary objectives when locating new operations, respondents consistently cited cost reduction as the number one objective.
- Reducing costs was followed by accessing markets, improving productivity, and increasing top-line revenue.
The factor most often cited by manufacturers as critical when making new location decisions was utility reliability and quality. Forty-nine percent of companies surveyed cited utility quality as a critical location factor. Other critical issues cited included:
- Access to markets
- Cost of labor
- Ease of doing business
- Labor relations and unionization
When asked about specific location preferences for new facilities and future expansions, the most likely destinations for domestic expansions are in the Southeast and Midwest. For those companies with global expansion plans, 50 percent plan to locate expanded operations in North America. For those companies planning to expand outside of North America, over 55 percent cited East Asia/Pacific Rim destinations. Western Europe, Central and South America, and Eastern Europe followed.
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The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
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