DRIFTING APART

U.S. MADE PRODUCTS HAVE BECOME A MELTING POT of parts and materials. The reason is offshoring, and U.S. manufacturers show no signs of slowing their spending on imports. U.S. manufacturers report on average imports comprised 11.2% of their dollars spent on materials and components in 2005, according

Of course, the big story in recent years has been the China factor. Of 464 plants responding, the average dollar volume spent in 2005 on Chinese materials/components was 4.7%, up from 2.3% in 2002 when 440 plants responded. But overseas outsourcing and sourcing isn't limited to China. A great deal is taking place in South America, India and Canada, says Colin Masson, research director for manufacturing operations at Boston-based AMR Research.

Current trends likely will continue if component and material costs are any indication. Per-unit cost of components and raw materials increased more than 10% for 38.9% of 643 survey respondents. Nearly 30% of manufacturers surveyed report a 6% to 10% rise in material and component costs, while only 3.3% say there was a 1% there was a 1% to 5% decrease.