On Making It In The U.S.
By Wanda Jankowski, Editor-in-Chief
In this election year with high national unemployment, political candidates are hoping to gain points with voters by talking about creating more jobs in the U.S. and bringing manufacturing back to America. Trade shows and markets have jumped on the bandwagon by creating “Made in the U.S.” exhibitor pavilions, providing attendees with easier access to companies that produce goods domestically.
I’m proud to say that LDB Interior Textiles was the first home textiles trade magazine to foresee the interest in “Made in the U.S.” issues and products—we’ve been the only home textiles trade magazine to cover the topic annually since 2008.
When it comes to the question of whether manufacturing will return to our country, the “Industry Views” column on this page features the opinions of some suppliers who already make products here.
Meantime, The Boston Consulting Group, a global management consulting firm, posted a release on its bcg.com website in May 2011 titled, “Made In The USA, Again: Manufacturing Is Expected To Return To America As China’s Rising Labor Costs Erase Most Savings From Offshoring,” as part of its ongoing study of global manufacturing’s future conducted by its Global Advantage and Operations practices division.
The analysis has good news, but bad news where the textile industry is concerned. First the good news, as the release states: “Within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world, according to a new analysis by The Boston Consulting Group.
“With Chinese wages rising at about 17 percent per year and the value of the yuan continuing to increase, the gap between U.S. and Chinese wages is narrowing rapidly. Meanwhile, flexible work rules and a host of government incentives are making many states—including Mississippi, South Carolina and Alabama—increasingly competitve as low-cost bases for supplying the U.S. market.”
Now for the bad news: “Products that require less labor and are churned out in modest volumes, such as household appliances and construction equipment, are most likely to shift to U.S. production. Goods that are labor-intensive and produced in high volumes, such as textiles, apparel and TVs, will likely continue to be made overseas.”
The release explains that China will remain an important manufacturing location to supply its own domestic market as well as western Europe, and because other low-cost countries, such as Vietnam, Thailand and Indonesia currently “lack the supply chain, infrastructure and labor skills to absorb all of it.”
For details on how much of products made in the U.S. are actually made here and whether it’s getting easier or harder to stay in business here, take a look at our “Homegrown Sales” article beginning on p. 8.