by Brianna Crandall — May 21, 2014—Multiple news reports, including a recent analysis from McKinsey & Co. that details the dynamic of manufacturing returning to the United States, are demonstrating that CoreNet Global’s Corporate Real Estate 2020 study, a forward-looking analysis of how corporate real estate will evolve by 2020, is already proving accurate, claims the organization.
CRE 2020, released in 2012, predicted manufacturing’s return to the USA and other Western nations: “The rebirth of domestic manufacturing moves counter to the wave of offshoring that has been rampant in recent decades. Manufacturers are beginning to recognize that many of the variables that go into location analysis, such as transportation and labor costs, have changed dramatically in recent years—eroding the clear cost advantages that once existed for offshore locations.”
Substantiating those predictions, a January 2014 report in the McKinsey Quarterly said that “off-shoring,” a term that carried an air of business sophistication in the 1990s, is now being replaced by “next-shoring,” a phenomenon that takes into account many of the forces cited by CRE 2020 to explain the new global manufacturing dynamic. “What’s increasingly clear…is that the assumptions underlying its predecessor, offshoring, are giving way to something new,” according to the McKinsey report, “Next-shoring: A CEO’s guide .”
“CRE 2020 is proving prophetic,” said Angela Cain, CEO of CoreNet Global. “There have been several reports this month that manufacturing activity is increasing in the U.S, and of course global dynamics such as energy cost savings and the decreasing labor cost differential make it less and less attractive to locate manufacturing facilities in emerging markets such as those in Asia.”
CoreNet Global is the worldwide professional association for corporate real estate (CRE) and workplace executives, service providers and economic developers. CoreNet Global’s 8,900 members, who include 70 percent of the top 100 U.S. companies and nearly half of the Global 2000, meet locally, globally and virtually to develop networks, share knowledge, learn and thrive professionally.