Reshoring
Currently 47 percent large companies from Europe and the USA have already invested in reshoring, i.e. transferring production from third countries back to the home market – according to the report “The revival of production: reindustrialization strategies in Europe and the United States” published on Tuesday. The report was based on research conducted in February 2024. survey among 1,300 managers employed in organizations with annual revenues exceeding USD 1 billion. in the US, UK and continental Europe, including France, Germany and Italy.
It was noted that investments in the construction or modernization of production plants are also growing in both the USA and Europe, it was reported. The authors of the report indicated that the aim of these activities is to increase the resilience of supply chains to potential disruptions.
Scale of investment
The report indicates that in European and American companies from many industries (including the production of consumer goods, the energy and chemical industries and the industrial machinery and equipment sector) cumulative investments in reindustrialization will increase by 18% over the next three years. compared to the past three years and will amount to USD 3.4 trillion. It was added that USD 1.4 trillion are American investments, and the remaining 2 trillion – European investments.
“Most funds are directed to initiatives within the domestic market and constitute 54% of cumulative investments over the last three years. However, obstacles such as staff shortages or shortages of raw materials will likely lead to an increase in short-term investments mainly in nearshoring and the so-called friendshoring, i.e. concentrating the supply chain network on countries considered political and economic allies,” the statement said.
Supply chain resilience
As reported, 72 percent surveyed enterprises are currently developing a reindustrialization strategy or have already implemented it. For almost 70 percent surveyed companies, the main reason for such work is the need to increase the resilience of the supply chain and the ability to adapt and quickly respond to operational disruptions – it was added. The fact how important this is has been particularly demonstrated by the COVID-19 pandemic, when the lack of e.g. electronic components paralyzed many industries (e.g. the automotive industry) – it was pointed out.
The study shows that 55 percent companies assume that reindustrialization will help them achieve climate goals, 63 percent considers domestic production to be strategically important for ensuring national security, and 62 percent predicts that the importance of reindustrialization in other strategic sectors such as electric vehicles, medicines and vaccines, and semiconductors will increase in the future. (PAP)
