Rising Labor Costs Not the Sole Factor Influencing Potential U.S. Manufacturing Resurgence, Says PwC
NEW YORK, NY―Consensus views on a U.S. manufacturing resurgence have largely centered on rising labor costs in markets such as China as the key driver of re-shoring back to the U.S. However, a new PwC U.S. report, A Homecoming for U.S. Manufacturing?, reveals that while rising labor costs are part of the story, a range of factors—including transportation and energy costs and protecting the supply chain—could drive a sustained manufacturing renaissance in the United States beyond any cyclical recovery, potentially improving investment, employment, production output and research and development (R&D).
PwC’s new report identifies seven factors, including transportation and energy costs; currency fluctuations; U.S. market demand; labor costs; U.S. talent; availability of capital; and the tax and regulatory climate—as the primary catalysts influencing manufacturers' decisions to establish production facilities domestically and produce products closer to their major customer bases. PwC's report also notes that localizing production can mitigate supply chain disruptions, which totaled $2.2 billion in financial impact for U.S. industrial products companies in 2011.