We Saw This Coming


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There have been quite a few predictions and studies, along with plenty of wishful thinking, about the cost of manufacturing in the U.S. The onshoring/re-shoring movement has gained a lot of attention from media like ours over the last couple of years. IPC even issued a report last year providing their take on the movement, which garnered a lot of interest from the industry.

Now, The Boston Consulting Group (BCG), a global management consultant, has released new research on the “dramatic” change of manufacturing cost competitiveness around the world. BCG’s press release is entitled, “Study Reveals Striking Shifts in Global Manufacturing Costs over the Past Decade.” I found the use of the word “striking” to be interesting. It almost leads me to believe they were surprised by the trends in manufacturing costs.

For those of us watching the shift over the last few years, it isn’t striking at all. It’s been coming for some time. As I’ve said in the past, all things come back into balance. The rising costs in Asia, and China in particular, have made it very clear that you can only sustain dirt-cheap manufacturing for so long. At some point, lax or non-existent labor and environmental standards, ridiculous lending policies, manipulated currencies, etc., will yield a day of reckoning. People get tired of breathing bad air and drinking polluted water. Trading partners say “enough is enough” and demand fair currency valuations. And banks struggle to survive under the weight of bad loans made during the heady days of unbridled growth.

Read the full column here.


Editor's Note: This column originally appeared in the June 2014 issue of SMT Magazine.

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