Continuing our blogs on offshoring, here is some interesting data from the European Manufacturing Survey conducted in 2009 as studied by Bernhard Dachs, Marcin Borowiecki, Steffen Kinkel and Thomas Christian Schmall (December 2012). Their survey quantifies the extent, trends, and reasons why European manufacturing firms offshore or re-shore production. Here is some of their key findings:
Figure 1 shows that, while there is some variation among European countries, the overall share of firms that offshore in the survey has decreased from 2006 to 2009.
Figure 4 shows that the share of German companies that offshore a part of production has declined from 2003 to 2009 in all surveyed industries.
Figure 7 quantifies the multiple motives behind an offshoring decision (multiple answered are allowed): while the motive to decrease labor costs is decreasing in favor of customer proximity and financial incentives, the quest to reduce labor cost remains the overwhelming motive behind offshoring.
In an earlier study, Dachs, Ebersberger, Kinkel and Waser (May 2006) showed that offshoring and reshoring is a dynamic process. The figure below shows the fraction of firms in the survey that were offshoring in 2003 (right) versus the fraction of firms that are reversing their previous decisions (left).
Finally, the four authors quantified the reasons behind reshoring using the EMS survey in 2004: