WASHINGTON, D.C. - A new report from the U.S. Chamber of Commerce and Ipsos, “Supply Chain Strategies and Nearshoring Opportunities in the Americas,” highlights the importance of supply chain resilience and the potential for nearshoring in the Americas. While companies are already implementing strategies to mitigate supply chain risks, the report provides insights into factors affecting investment and manufacturing decisions in different regions in the Americas.
The report indicates a significant window of opportunity for nearshoring in the Americas as about one in four businesses (28%) that currently manufacture in Asia report planning to move out of the region in the next five years. Meanwhile, some businesses that don’t currently manufacture in Mexico (14%), South America (11%), or Central America and the Caribbean (6%) indicate that they are planning to move into those regions during that same timeframe. Three in five companies invested in Mexico are planning to continue their investments in the next two years.
The report underscores that eliminating barriers is key to building a more competitive destination for investment. Baseline concerns included safety and security, the rule of law, and the stability of the market. Labor is still an important topic on business owners' minds, even though many don't feel it is as big of an obstacle as other worries, like safety and security.
Larger companies – those with an annual revenue of $50 million or more – are more likely to report that they have already implemented, or plan to implement, many of the supply chain strategies asked about compared to those with revenue less than $50 million. But here are factors that businesses of all sizes have in common:
- Logistics is considered the most important factor when deciding both where to source materials and where to make direct investments (e.g., shipping costs, lead time for deliveries). For sourcing goods, logistics is an important factor for 99% of mid-sized and small companies and 93% of large companies.
- Labor is an important factor both for sourcing goods (93%) and making a direct investment (89% for SMEs and 86% for large companies).
To build on this progress, the new report urges:
- Public-private cooperation efforts should emphasize full implementation of trade facilitation agreements, customs and trade facilitation commitments under existing trade agreements
- Implementation of good regulatory practices and anti-corruption measures
- Expanded agreements or protocols with other partners in the region
The Americas Partnership for Economic Prosperity (APEP) Leaders Summit is being held today in Washington, with the goal of advancing a regional framework for regional cooperation focused on regional competitiveness, resilience, shared prosperity and sustainable and inclusive investmentin the Western Hemisphere, including building more resilient supply chains and sustainable infrastructure. The Chamber intends to draw on the findings of this survey to identify new areas of collaboration with governments and other stakeholders as we continue our efforts to build a more competitive environment for investment, job creation, and shared prosperity.
“We applaud the U.S. for convening the first APEP Leaders’ meeting to drive forward solutions that will catalyze investment in the region,” said U.S. Chamber’s Neil Herrington, Senior Vice President of the Americas. “We believe that initiatives like the Americas Partnership for Economic Prosperity can support countries’ efforts to tackle major investment barriers through enhanced rule of law, good regulatory practices, and infrastructure modernization to bolster trade and seize the present nearshoring opportunity.”
For more information or to access the full report, please visit here.