Jobs lost to China coming home

China Oct 27, 2011 No Comments

Jobs lost to China coming homeNew research from the Boston Consulting Group (BCG) in Chicago suggests transportation goods such as vehicles and auto parts, electrical equipment including household appliances, and furniture are among seven sectors that will reach a tipping point by 2015 and could create up to 3 million jobs as some of the manufacturing returns to North America. BCG expects the trend to accelerate starting in the next five years.

Sometimes proximity is a good thing. Manufacturing offshore in China for North American markets is not as cost-effective as it once was, and it appears some of the production lost to overseas locales may be coming back to the US.

The “tipping point” is where China’s shrinking cost advantage should prompt companies to rethink where they produce certain goods meant for sale in North America. BCG said in many cases, companies will shift production back from China or choose to locate new investments in the US, which is also expected to become a more competitive export base for Europe and Canada.

A surprising amount of work that rushed to China over the past decade could soon start to come back – and the economic impact could be significant,” said Harold Sirkin, a BCG senior partner and lead author of the analysis. “We’re on record predicting a US manufacturing renaissance starting by around 2015. Now we can be more specific about which industries will return and why.”

BCG’s research shows other sectors most likely to return are plastics and rubber products, machinery, fabricated metal products and computers/electronics. The seven groups together offer an additional $100 billion in output to the US economy and lower the US non-oil trade deficit by 20% to 35%.

via $100B in lost output to China coming home: BCG | Canadian Manufacturing.

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Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.

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