Supply Chain Americas Report Digital
October 24, 2023
The U.S. Chamber, alongside Ipsos, released the report "Supply Chain Strategies and Nearshoring Opportunities in the Americas" as one of the outcomes of the IV CEO Summit of the Americas to better understand corporate decision-making around supply chain strategy, investment, and sourcing site selection in the Americas region.
Governments throughout Latin America and the Caribbean are uniquely positioned to tap into nearshoring opportunities and should be timely in doing so.
About half of the U.S. companies polled that don’t currently manufacture in Mexico, South America, or Central America and the Caribbean say they are planning to move into the region within the next five years.
Governments should prioritize areas identified by businesses, in particular, improvements to logistics and rule of law, to be among the most significant investment barriers across the region.
The U.S. Chamber of Commerce has long advocated for closer trade and investment ties between the United States and its neighbors in the Western Hemisphere to generate economic growth, prosperity, and stability. The CEO Summit of the Americas, organized by the Chamber in partnership with the State Department as part of the IX Summit of the Americas in Los Angeles, provided a valuable platform for a public-private dialogue on concrete steps to promote inclusive and sustainable growth in the hemisphere.
As one of the outcomes of the CEO Summit, the Chamber committed to conduct a global survey to better understand corporate decision-making around supply chain strategy, investment, and sourcing site selection in the Americas region.
Chris Jackson, Senior Vice President of Public Affairs at Ipsos, gave a presentation analyzing the results of the survey. Watch here:
- Examine supply chain realignment trends and companies’ priorities, as well as their assessment of the business environment across the Americas
- Provide valuable data points for policymakers regarding the factors that are most important to companies when determining where to source goods or make a direct investment; perceived barriers in the Americas; and future plans for manufacturing investments.
- Across the board, companies are sourcing from multiple suppliers and relying on suppliers from multiple geographies as the predominant strategies to mitigate supply chain risks. While fewer say that they are currently relying on suppliers close to their customer base/sales hub, nearly half say they are likely to do so over the next year.
- Countries in the Americas region have the potential to attract new investment related to nearshoring. Of the markets where companies are not currently manufacturing products, Asia, Mexico, and South America were identified as the most attractive, with a relatively narrow difference between Asia (15%), Mexico (14%), and South America (11%).
- Logistics was identified as 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 was an important factor for 99% of mid-sized and small companies and 93% of large companies. It is worth noting that for large companies making a direct investment, logistics was less important.
- Labor is an important factor both for sourcing goods (93%) and making a direct investment (89% for SMEs and 86% for large companies). Labor was defined as including both costs and skill levels.
- The survey reinforces prior Chamber surveys that highlight the importance of rule of law. There is a smaller gap between SMEs and large companies in terms of how they view its importance in this survey.