CFO Survey: Outsourcing Declines In U.S.

June 13, 2011

A survey by BDO USA, a consultant, reveals that outsourcing has declined among US firms.

Among the 100 CFOs surveyed, about 35% of them responded that their firms are currently outsourcing to other countries. The outsourcing pertains to manufacturing and other service related products. In comparison, this is down from 2009 figures – 69%, and a moderate decline from last year – 37%.

The survey also showed that those companies that were currently not involved in outsourcing (65%), most of them did not consider outsourcing to faraway destinations (58%) like Asia, for example. The respondents favored the U.S. (25%) and Canada (13%) or they had no intention to outsource.

Additionally, the CFOs polled said that there was some concern linked to tax breaks; they did not see a move to transfer jobs overseas as an imminent plan.

Partner in The Technology and Life Sciences Practice, BDO USA, Don Jones, commented, “Outsourcing can be looked at as a bellwether of the economy,” in an online report by Sourcingmag.com.

He added, “Tech companies turned to outsourcing in 2009 in order to reduce operating costs and ride out the recession. Since then, we’ve seen a marked decrease as companies recover and look to create jobs and growth close to home.”

Following 2008, most overseas outsourcing locations saw a decline in U.S. firms establishing operations abroad. On average, each destination observed a 29% decline, while Western Europe managed to retain interest in outsourcing operations with a mild increase of 9%.

Although there is a general trend to decrease outsourcing, India has replaced China as the favored outsourcing destination. India is now poised for rapid economic growth at a blistering rate of 8.2% and a younger population than China. In addition, the talent pool available in India is valued by U.S. firms for near-native understanding of English and areas like software programming.On the whole, 24% respondents selected India over China, while 18% of those surveyed picked China.


Comments

2 Responses to “CFO Survey: Outsourcing Declines In U.S.”

  1. Alyssa row on June 29th, 2011 8:38 am

    Well, i don’t think so that CFO survey is effected because the this survey may be effect on USA economy.

  2. Consumer Drives Market | Chaitalinath05's Blog on July 1st, 2011 9:19 am

    […] CFOs in the United States indicates that US corporations are downsizing the amount of outsourcing (http://outsourceportfolio.com/cfo-survey-outsourcing-declines/), US consumers’ will drive the corporations to outsource even more than previous years. […]

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