Domestic manufacturing strong in the MidwestManufacturing in the American Midwest has increased, according to new data from the Federal Reserve Bank of Chicago's Midwest Manufacturing Index. The numbers reveal that the rate of production in the region jumped 1.6 in November to a seasonally adjusted 93.7 after October numbers dropped 1.1 percent.

Data indicated all four sectors expanded in November. Regional auto sector production jumped 3.6 percent, regional steel sector output increased by 0.9 percent, regional machinery sector production gained 0.2 percent and the resource sector output climbed 0.7 percent.

The benefits of domestic production
As offshore manufacturing often offers manufacturing operations lower operating costs and the chance to pay less in wages, many companies have taken their production overseas in recent years. However, it has become more popular for businesses to come back to the U.S. in recent months and the Midwest may be where some are moving their new domestic facilities.

While some companies choose to enjoy the low manufacturing labor costs in Asia, others are looking for options in the American Midwest. Being in the heart of the country can allow corporations to get their goods to market more quickly and adjust production in a timely fashion, rather than waiting weeks for shipments from across the world or waiting days to ramp up orders from overseas.

Considerations for domestic manufacturing
However, there are concerns and challenges for those looking to nearshore their operations and move to the Midwest. Different states can offer businesses incentives or deter them from setting up facilities with laws and industry regulations.

Businesses concerned about high labor costs or getting involved with union labor may look to "right-to-work" states in the Midwest when determining where to place their operations. Michigan and Indiana recently passed such legislation, which may prove to be an effective way for the states to attract more manufacturing plants and companies. Those looking for plenty of access to multiple logistical routes may look to Illinois, as being near Chicago gives them the opportunity to take advantage of transit options such as airports, railways, major trucking routes and ports.

However, companies looking to save the most on labor may consider Iowa. According to Crain's Chicago Business, the state was ranked as having the most cost-efficient labor expenses, making it another contender for those considering moving their operations to the Midwest.
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