U.S. Competitiveness in 2015

A 2013 study by a group led by Hal Sirkin, who analyzes economic trends at the Boston Consulting Group (BCG), is seeing an acceleration of U.S. and other countries setting up their manufacturing businesses in the U.S. The major catalysts have been: rising labor costs in China and lower energy costs from the shale boom. The losers from this trend are likely to be Japan and Europe. For example, the wholesale price of natural gas in the U.S. has dropped by 50% while natural gas prices in Europe and Japan are 2.6 to 3.8 times higher than in the U.S. The table below is based on projections, what costs are expected to be in 2015. U.S. labor and productivity figures are based on eight low-cost states, primarily in the Southeast. The estimates for China are based on the Yangtze River Delta Region. As you can see, labor costs are virtually identical for all countries in the study, with the exception of the U.K. and China. Critics of the BCG report believe the gains the U.S. will experience will not begin until 2015 and will reach their full benefit in 2020. BCG Manufacturing Cost Index: 2015 Projections

Country	Labor	Natural gas	electricity	other	totals
US	79	2	1	18	100
Italy	78	5	5	30	118
Germany	78	8	2	27	116
France	79	8	2	27	116
Japan	77	6	2	25	110
U.K.	81	6	2	19	108
China	74	4	2	15	95

 

 

 

A 2012 report by the International Energy Agency predicts the U.S. will surpass Russia as the world’s leading natural gas producer around 2015; the U.S. will surpass Saudi Arabia as the world’s leading oil producer around 2020. From 1996 through 2012, U.S. oil consumption has actually dropped, despite a population increase of almost 46 million.