Written by: Steve Melito, Industry Blog Writer for FuzeHub
Image Credit: Food Manufacturing
Dan North is bullish on reshoring. The chief economist at Euler Hermes, the world’s largest trade credit insurance company, cites America’s relatively low labor and energy costs, steady employment growth, and increased manufacturing productivity. Higher interest rates and a stronger U.S. dollar could pose long-term threats, but North expects today’s positive trends to continue.
With the lowest labor costs in the industrialized world, the United States is such an attractive destination that 54% of manufacturing executives say they are planning to reshore or seriously considering it. Since the Great Recession ended, unit labor costs for U.S. manufacturing have fallen by 6.2%. By contrast, unit labor costs for other economic sectors have risen by 2.3%. Combined, that’s an 8.5% differential.
Dan North also writes that America is “awash in cheap energy”, with domestic production of natural gas expected to continue. Although the winter of 2013 – 2014 saw price spikes due to extremely cold weather, U.S. manufacturers will still pay less long-term than their counterparts in others parts of the world. This is a “significant boost to the U.S.”, North explains, and “an incentive to companies to reshore”.
Finally, the economist is bullish on reshoring because total manufacturing employment in the U.S. has grown for the last 9 consecutive months. Total unemployment is down since the start of 2014, but it’s still higher in the economy as a whole (6.3%) than in manufacturing (5.2%). Given these numbers, do you share Dan North’s optimism that the reshoring of manufacturing jobs will continue?
Read Full Story: Reindustrialization: Reshoring Jobs to the U.S.
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