Supply Chain Trend: Made in Americas, But Not the USA
Politicians are making political hay this year out of the resourcing trend — but it may be that this trend is less about the USA and more about growth in other areas of America.
It’s true that manufacturing jobs are returning to the USA, but there are serious questions about the impact and strength of this trend. In fact, Bloomberg Businessweek recently reported the resourcing trend is already losing steam because of a global economic slowdown and the resulting weakened demand for US goods.
Even before this recent slowdown, the Journal of Commerce Online questioned the trend, noting that the return of jobs to the US from Asia barely offset the outsourcing of more US manufacturing jobs.
Another factor: While jobs may be America bound, they’re not always bound for the USA. Many manufacturers opt to open or grow facility in nearby Mexico, Brazil and Canada — a trend technology research firm Gartner calls “near-sourcing.”
The lineup at a recent sourcing summit designed to highlight the US supply chain reveals a lot about what’s really going on. The summit’s theme wasn’t Made in the USA; it was “Made in the Americas.” And while sourcing in the USA was a topic of discussion for retailers and apparel, so was another option: “…the advantages of pairing US production with Central and South american materials…”
Mexico, in particular, is experiencing what the Financial Times called a “little-publicized manufacturing revolution.” Mexico now ranks as the second-largest economy in Latin America, and is considered a “credible competitor” to China, the article continues. That said, the article goes on to state “with more than a quarter of the share of US imports, the Asian colossus outpunches Mexico in terms of volume.”
Still, Mexico now exports more manufactured goods than the rest of Latin America put together.
The Financial Times credits part of Mexico’s success with its decision to embrace trade and openness: It has free trade agreements with 44 countries.
Brazil, which has the largest Latin American economy, also remains a popular manufacturing destination, especially for the technology sector. Chinese company FoxConn is even expanding in Brazil.
So while Made in the USA may appeal to voters, increasingly, a more realistic slogan might be Made in the Americas.