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KSM Blog | Katz, Sapper & Miller CPA

U.S. Manufacturing Is Here to Stay

Posted 7:31 PM by

The idea that the United States cannot compete with China and other low-cost countries in manufacturing has become obsolete. Harold Sirkin of the Boston Consulting Group illustrates this in his recent Bloomberg article, “China vs. the U.S.: It's Just as Cheap to Make Goods in the USA.”

Sirken states that when considering energy expense and productivity alone, for every dollar it costs to manufacture a product in the United States, it now costs .96 to make it in China.

As wages in China and elsewhere continue to rise, the future of cost-effective manufacturing lies within the U.S. The Reshoring Initiative reports that foreign direct investment (FDI) is gaining momentum: The number of jobs lost to offshoring in 2014 was approximately 45,000 as compared to the 140,000 lost in 2003 – a 68% decrease.

The initiative believes the appeal of FDI can be credited to improved government incentives, a skilled workforce, automation, and the increased value of products “made in the USA,” for which 45% of Americans say they make a special effort to buy and 60% are willing to pay more.

When it comes down to it, whether a company is U.S.- or foreign-based, now is the time to invest in U.S. manufacturing. People want American-made products and they want them fast. Setting up facilities near the U.S. consumer now ensures satisfied demand, as well as a future product savings plan as overseas manufacturing costs continue to rise.

About the Author
Stephen Short is a member of Katz, Sapper & Miller’s Audit and Assurance Services Department. Stephen audits and reviews financial statements, and he advises clients on accounting, reporting, compliance and internal control matters. Connect with him on LinkedIn.

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