The United States and Mexico are the clear winners in the global scramble for competitiveness in manufacturing, according to “The Shifting Economics of Global Manufacturing,” a new report from The Boston Consulting Group.
While Asia, Latin America and Eastern Europe once held a huge cost advantage over other regions of the world, that simply isn’t the case anymore.
“Years of steady change in wages, productivity, energy costs, currency values and other factors are quietly but dramatically redrawing the map of global manufacturing cost competitiveness,” the report says.
Some shifts are “startling,” the report notes. Brazil is now among the highest-cost countries for manufacturing, for example, while Mexico is now cheaper than China.
“While London remains one of the priciest places in the world to live and visit, the United Kingdom has become the lowest-cost manufacturer in Western Europe,” the BCG says. “Costs in Russia and much of Eastern Europe have risen to near parity with the U.S.”
BCG analyzed the costs of manufacturing for 25 of the world’s leading exporters, focusing on wages, productivity, energy costs and exchange rates.
Cost structures in Mexico and the United States improved more than in all of the other 25 largest exporting economies, the report says.
“Because of low-wage growth, sustained productivity gains, stable exchange rates and a big energy-cost advantage, these two nations are the current rising stars of global manufacturing,” the report said.
