Mark Szakonyi, Associate Editor | Sep 21, 2012 1:24PM EDT
U.S. export growth and the shift of production back to the U.S. could create up to 5 million jobs and $130 billion in additional annual exports by 2020, according to a recent Boston Consulting Group study.
The report is an upward revision of the consulting group’s previous 2011 study that estimated near-sourcing would create up to 3 million jobs, and the most recent estimates are based on a closer study of how competitive U.S production is with that of its major rivals. The Hackett Group, a global consulting firm, however, argues that the jobs created through near-sourcing will be a near wash because of continued outsourcing.
“The export manufacturing sector has been the unsung hero of the U.S. economy for the past few years. But this is only the beginning,” said Harold Sirkin, a BCG senior partner and co-author of the study. “The U.S. is becoming one of the lowest-cost producers of the developed world, and companies in Europe and Japan are taking notice.”
The U.S. will have a manufacturing cost advantage of between 5 percent and 25 percent over Germany, Italy, France, the U.K. and Japan in various industries, according to BCG. Average U.S. manufacturing costs in 2015 will be 8 percent lower than in the U.K., 15 percent lower than in Germany and France, 21 percent lower than in Japan and 23 percent lower than in Italy, according to the study. Although BCG estimates manufacturing costs in China will still be on average 7 percent cheaper than in the U.S., American producers still save on transportation, duties and other costs.
Lower natural gas prices could help the U.S. snatch up to 4 percent of exports from four European competitors and up to 7 percent from Japanese counterparts, equaling about $90 billion in additional annual exports. Natural gas costs are expected to remain 50 to 70 percent cheaper in the U.S. than in Europe and Japan.
BCG adds U.S. exporters of goods to Asia also enjoy cheaper transportation costs than their European competitors. U.S producers who ship to Japan, for instance, spend 59 percent less on transportation than their European rivals.
Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @szakonyi_joc.
