We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Perceptions of countries' cost competitiveness are outdated, report says
Forward Thinking

Perceptions of countries' cost competitiveness are outdated, report says

September 19, 2014
Supply Chain Quarterly Staff
No Comments

New research from the Boston Consulting Group (BCG) indicates that countries that are perceived as low-cost manufacturing locations, such as Brazil and Russia, are no longer much cheaper than the United States, and countries once thought of as high-cost, such as the United Kingdom, have become much more competitive in recent years. This development is already spurring a number of companies to change their global sourcing and manufacturing investment strategies.

"Many companies are beginning to see the world in a new light," said Harold L. Sirkin, a senior partner at the Boston Consulting Group who co-authored the report, titled The Shifting Economics of Global Manufacturing: How Cost Competitiveness is Changing Worldwide. "They are finding that many old perceptions of low-cost and high-cost countries are out of date, and they are starting to realign their global sourcing and production networks accordingly."

The report noted that traditionally low-cost countries, such as Brazil, China, Czech Republic, Poland, and Russia, are under pressure to maintain that advantage. At the same time, the competitiveness of traditionally high-cost countries, such as France, Italy, and Sweden, continues to deteriorate due to weak productivity gains and higher energy costs. Some countries that were long considered to be high-cost, such as the U.K., have become much more competitive and are attracting manufacturers in the automotive and other industries.

BCG singled out Mexico and the United States as "rising stars" because of their moderate wage growth, sustained productivity, and energy cost advantages. The report points out that Mexico has surpassed China in terms of cost competiveness. In 2004, China's average manufacturing costs were estimated to be 6 percent higher than Mexico's, according to BCG. But currently Mexico is around 4 percent cheaper than China. That's partly because China's manufacturing wages have nearly quintupled since 2004, while Mexican wages have risen by less than 50 percent in U.S. dollar terms.

Companies should expect relative cost competitiveness around the world to remain dynamic, according to the report, which also includes recommendations for dealing with such volatility. For details, click here.

  • Related Articles

    From controlling cost to ensuring supply: inbound supply chain’s focus shifts, says research report

    Which countries are riskiest?

    Retail imports rising under threat of higher tariffs, report says

Recent Articles by Supply Chain Quarterly Staff

IoT vendors say industry needs better collaboration

Survey: only 55% of shippers filled their LTL trucks to full capacity in 2022

Survey: consumers set price cap on paying sustainability premium

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Survey: parcel delivery drivers are frustrated by using their own smartphones for work

  • Survey: most Americans unaware that truckers face shortage of parking spaces

  • Best practices in logistics sustainability

  • Supply chain executives not yet seeing expected results from technology investments

  • Postal Service plans to seize items mailed with fake stamps

Featured Video

20221107korber large vs

Enhancing Customer Experience with Your Supply Chain Strategy

Viewer Contributed
With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

FEATURED WHITE PAPERS

  • Five tips for parcel success in 2023

  • Guide to Pallet Rack Safety

  • 3PLs: Complete Orders Faster with Flexible Automation

  • A shipper's guide to navigating post-pandemic holiday freight

View More

Subscribe to Supply Chain Quarterly

Get Your Subscription
  • SUBSCRIBE
  • E-NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing