“Made in the USA” on the rise as manufacturing costs drop
Posted Sep 04, 2013
By Kiran Moodley, CNBC
Americans may be fond of lamenting the decline of the country's economic clout and the flood of "Made in China" goods, but they may soon have to find something else to complain about.
According to the Boston Consulting Group (BCG), the U.S. is fast becoming one of the lowest-cost countries for manufacturing in the developed world. BCG argues that average manufacturing costs in Germany, Japan, France, Italy, and the U.K. will be 8 to 18 percent higher than in the U.S. by 2015.
The report states that export manufacturing in the U.S. is a unsung hero of the economic recovery, noting: “Despite all the public focus on the U.S. trade deficit, little attention has been paid to the fact that the country's exports have been growing more than seven times faster than GDP since 2005.”
BCG found that the U.S. is increasingly attractive for businesses due to lower costs of labor, (adjusted for productivity), natural gas, and electricity.
U.S. manufacturing activity hit a five-month high in August as hiring picked up and new orders increased at their fastest pace since January, a Markit report showed last Thursday.
However, BCG’s report argues that we are currently just witnessing the beginning of a major shift in global manufacturing.
“Over the past 40 years, factory jobs of all kinds have migrated from high-cost to low-cost countries,” said Harold L. Sirkin, co-author of the report. “Now, as the economics of global manufacturing changes, the pendulum is finally starting to swing back. In the years ahead, it could be America’s turn to be on the receiving end of production shifts, as more companies use the U.S. as a low-cost export platform.”
To read the full article, visit http://nbcnews.to/15nCVXi.