Some of the biggest gains in U.S. exports, caused by a
widening U.S. production cost advantage over leading
European nations and Japan, are likely to be seen in machinery and transportation equipment, according to a
new report by The Boston Consulting Group (BCG), a
Chicago-based global management consulting firm and
adviser on business strategy.
The report, titled “Behind the American Export Surge:
The U.S. as One of the Developed World’s Lowest-Cost
Manufacturers,” updates and elaborates on BCG research
released last September, in which the firm predicted that
higher exports as well as reshoring from China and else-
where could add 2. 5 million to 5 million manufacturing
and related service jobs by the end of this decade. That,
in turn, could reduce the unemployment rate, currently
7. 4 percent, by as much as 2 to 3 percentage points. The
report’s projections are based on an
analysis of labor, energy, and logis-
tics cost trends in the U.S., Germany,
France, Italy, the U.K., and Japan, all of
which are major exporters of manu-
“Over the past 40 years factory
jobs of all kinds have migrated from
high-cost to low-cost countries,” said
Harold L. Sirkin, a BCG senior part-
ner and a co-author of the report.
“Now, as the economics of global
manufacturing changes, the pen-
dulum is finally starting to swing
back. In the years ahead it could be
America’s turn to be on the receiv-
ing end of production shifts, as more
companies use the U.S. as a low-cost
Labor costs will be especially im-
portant sources of competitive ad-
vantage in U.S. manufacturing. Ad-
justed for productivity, U.S. labor
costs are projected to be 15 to 35
percent lower than those of Western
Europe and Japan by 2015 for many
products. Only a decade ago, average
productivity-adjusted factory labor
costs were about 17 percent lower in
the U.S. than in Europe, and 3 percent
lower in the U.S. than in Japan.
Cheap energy also will boost U.S.
competitiveness in several indus-
tries. By 2015 prices for natural gas
are projected to be 60 to 70 percent
lower, and electricity is projected to
be 40 to 70 percent cheaper in the
U.S. than in Europe and Japan.
Compared with other developed
economies, the U.S. is particularly
well-positioned to increase exports in
seven industrial categories, according
to the report: machinery, transportation equipment, chemicals, petroleum and coal products, computer
and electronic products, electrical
equipment and appliances, and primary metals. These seven sectors account for roughly three-quarters of
total global exports. The job gains
would come directly through added
factory work and indirectly through
supporting services, such as construction, transportation, and retail.
“It will take several more years
for the full impact of improved U.S.
competitiveness to translate into
significantly more jobs and higher
industrial output,” said Michael Zinser, a BCG partner who leads the
firm’s manufacturing practice in the
Americas and a co-author of the re-
Machinery, transportation equipment to see big export gains, report says
Made in the USA
YOUR PRECISION. YOUR PRODUCTIVITY. YOUR PROFITABILITY.
From advanced technology and intuitive software to highly responsive service and forward-thinking
support, OMAX empowers you to surpass your competition and grow your business. You can rely on
OMAX waterjet technology for all your part processing needs, whether it’s manufacturing small or
large components, from stainless steel and titanium to advanced composites and glass.
OMAX brings the highest level of accuracy, speed, simplicity and versatility to your operations
because we understand that at the end of the day, it’s your success that matters.
AT THE CENTER IS YOU.
SHAPING THE FUTURE OF WATERJETS
VISIT US AT