The COVID-19 pandemic is putting a major wrench into the concept of offshore, prompting an increasing number of corporate firms to consider onshoring, moving their production facilities close to the customers they serve, according to a survey of site selection professionals by Site Selection Guild.
The emerging trend will no doubt benefit North America, says the Guild, predicting an uptick in onshoring to the United States, Canada, and Mexico – especially in the pharma and life sciences industries.
“The previous focus on the lowest cost scenario, which led to growth in China and Southeast Asia, will now become more balanced as companies look to reduce risk,” the Guild added.
More than 50% of site selection projects have now been paused, with corporate bosses buying time to think of a new strategy in the wake of the pandemic.
In the survey, 45% of Guild members said they were carrying on with their projects, yet none of the respondents said their clients had canceled the plans outright.
The site selection professionals say the growing trend of teleworking will disrupt the office real estate market like never before, predicting that the practice will change how work is done in the future for both the employer and employee.
They appear convinced that the demand for office space will decrease dramatically, and the world will readily adopt new technologies for allowing people to work remotely.
When asked when client companies will re-start expansions or the addition of new facilities, 55% of respondents predicted Q4 of 2020, and 45% said sometime in 2021.
The survey was conducted online in mid-April.