6 charts show global trade and supply chain nearshoring trends

Recent factors have eroded the cost competitiveness of production in China, and the appeal of globalization for many supply chains lessened.

For decades, supply chains extended their reach and embraced globalization. Manufacturers popping up in developing nations offered the promise of skilled labor at a low cost.

But recent factors have eroded the cost competitiveness of production and imports from China. The country's middle class emerged and wages are rising. Tariffs bumped up the price of imports by up to 25%. Buyers focused more awareness on upstream risks of human labor, intellectual property violations and sustainability. And most recently, the COVID-19 pandemic led to skyrocketing airfreight rates and peak-season-level ocean freight prices.

The appeal of globalization for many supply chains lessened, and moves to Mexico or the U.S. became attractive. But with deep roots in China, a mass exodus is unlikely. Rather, China +1 is gaining popularity.

The charts below demonstrate diverging trends related to global trade and reshoring — in some cases supply chains are moving closer to home, but in others, manufacturing remains overseas.

China labor costs outpace Mexico's

Average compensation for manufacturing workers in U.S. dollars per hour

Reshoring sees largest positive moves since 2009

CPA's reshoring index, measuring annual change in the share of U.S. consumption of manufactured goods that is met by US producers

Few businesses plan significant sourcing, manufacturing changes

% of respondents in a Deloitte poll to the question: To what extent are you considering more reshoring and localization due to the impact of COVID-19?

Nami Sumida/Supply Chain Dive

After surging in 2019, semiconductor imports fall in 2020

U.S. semiconductor imports, millions of dollars

US textile production did not rebound after NAFTA, international policy changes and the recession took the air out of the industry

U.S. production of textiles and textile products from Q1 1972 to Q1 2020

Textile imports from China double those of the next largest US import country

US cotton textile and apparel imports by origin in raw-fiber equivalent pounds

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