The Boston Consulting Group ranks US as No. 2 in manufacturing competitiveness

A new report released by The Boston Consulting Group in April finds the U.S. is increasing its manufacturing competitiveness compared to other countries. BCG ranks countries based on wages, productivity growth, energy costs and currency exchange rates to determine the state of each nation's manufacturing industry.

The top 10 countries for manufacturing competitiveness are:

  1. China
  2. U.S.
  3. South Korea
  4. U.K.
  5. Japan
  6. Netherlands
  7. Germany
  8. Italy
  9. Belgium
  10. France

The U.S. is considered a "rising star" in BCG's report. Manufacturing costs in the U.S. are decreasing due to stable wage growth, increasing productivity, a steady currency and advancements in energy such as large scale shale gas production, which began in 2005. Costs in the U.S. are now 10 percent to 25 percent lower than the costs of the world's 10 leading exporting nations, other than China.

While China is still the No. 1 country in regards to competitiveness, it's advantage is decreasing and the U.S. is approximately 5 percent behind the country in costs.

The report found five countries have seen increasing prices over the last decade. China, Brazil, the Czech Republic, Poland and Russia have fewer cost advantages than they did in 1994 because of rising wages, decreasing productivity, increasing energy costs and negative currency issues. Some countries are holding steady, according to BCG. Indonesia, India, the U.K. and the Netherlands have remained stable due to various factors.

"While labor and energy costs aren't the only factors that influence corporate decisions on where to locate manufacturing, these striking changes represent a significant shift in the economics of global manufacturing," said Michael Zinser, a BCG partner. "These changes should drive companies to rethink their sourcing strategies, as well as where to build future capacity. Many will opt to manufacture in competitive countries closer to where goods are consumed."

Businesses in the U.S. experiencing growth should partner with manufacturing recruiters to find qualified and skilled candidates for their new positions.