When asked to evaluate low-cost manufacturing locations for the production of goods bound for North America, executives of small and mid-size manufacturing companies taking part in a survey chose the United States and Mexico over China by a four-to-one margin. That is one of the surprising findings of a survey conducted by Entrada Group, a Texas-based firm that assists companies in transfering production operations to Mexico. The survey was completed in early 2014, and more than half of the respondents identified themselves as being at the VP level or higher.
Rising labor and shipping costs are making China a less attractive outsourcing location for companies producing goods that are intended for North American consumption. Also, burdensome and opaque business practices in China, which companies are willing to suffer through when the return on investment is favorable, become a defining deficit as other regions become more competitive.