It would be easy to get ahead of last week’s announcement from Caterpillar, that it is studying plans to build new domestic production capacity for its hydraulic excavators, and call it a trend. Several reports have hailed this as an example of “re-shoring,” or "on-shoring," or “near-sourcing,” of whatever is the preferred label for a perceived trend of manufacturers choosing domestic sites over off-shore locations, for new production capacity — or for re-locating production capacity.

I don’t know if that’s exactly the case with Caterpillar’s announcement. "The study is based on the current analysis of where the global excavator market is heading and how Caterpillar should position itself for continued leadership in the excavator industry," said Gary Stampanato, Caterpillar vice president with responsibility for excavators.

Don’t dismiss re-shoring, however: it is happening and it will continue to happen as manufacturers “develop the appropriate global footprint” (Caterpillar’s phrase) for their business. But, with respect, these are decisions to be made by large organizations that study comparative advantages on an ongoing basis. In fact, what Caterpillar is actually revealing in its release is that it sees expanding demand for its hydraulic excavators in China and Asia, and that it wants to dedicate its available plant capacity in the region to serving those markets.

Caterpillar isn’t actually saying too much about domestic business conditions that would argue for adding domestic manufacturing capacity for its hydraulic excavators, e.g., consumer demand, feasible corporate tax levels, manageable labor and costs, and so forth.

To know where re-shoring holds real promise, check the study published by NADCA a bit more than a year ago. Most manufacturers are not global (as Caterpillar is), but they need to be attuned to the choices that global manufacturers can and must make for their own sake.

When manufacturers (e.g., Caterpillar) conclude that they must be active in the domestic economy, because they recognize sustained levels of consumer demand here; and that they must line up suppliers for their domestic operations, in order to achieve standards for logistics, product development, quality control, and customer service, among others, … that will be a trend worth spotting.

More to the point, the re-shoring trend, and Caterpillar' pending decision, are perfectly predictable and welcome evidence of a global manufacturing economy that is growing more interdependent.