TECHNOLOGY AT WORK

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Citi GPS: Global Perspectives & Solutions February 2015
The Boston Consulting Group Manufacturing Survey suggests that more American
companies are weighing the decision to manufacture in the US again. Figure 36 and
Figure 37 provide a snapshot of the survey published in the Wall Street Journal.
Figure 36. Q: Given the fact that China’s wage costs are expected to
grow 15-20% per year, do you expect your company will move
manufacturing to the US?
Figure 37. Q: Please rank the most important factors you consider
when deciding where to locate production for products consumed in
the US
Rubber and miscellaneous plastic
products
67%
33%
Labor costs
57%
Industry and commercial machinery
42%
58%
Electronic and electrical equipment and
components
41%
59%
Product quality
41%
Computer equipment
40%
60%
Ease of doing business
29%
Fabricated metal products
35%
65%
Transportation equipment
30%
70%
Proximity to customers
28%
No
0% 20% 40% 60% 80% 100% 120%
Yes
0% 20% 40% 60%
Source: Boston Consulting Group Manufacturing Survey, Feb 2012, WSJ
Source: Boston Consulting Group Manufacturing Survey, Feb 2012, WSJ
There have been several recent examples of
manufacturing companies reshoring to the
US
We highlight in Figure 38 several examples of manufacturing investment in the US
from both domestic and international industrial companies. This illustrates the
theme of a global flow of capital into the US sector; the new facilities have not only
increased the activities of multinational companies within the US, but have also
added thousands of manufacturing sector jobs in the country. With this comes an
increase in automation and more efficient production resources. There are now
~225,000 operational robots in US-based factories, placing the US second only to
Japan in terms of robot use. One driver of the shift to robotics in North America has
been the increase in capex investments by automotive original equipment
manufacturers (OEM) and component suppliers, which allocate about 50% of their
spending on robots. There has also been a growing application of robots in other
non-auto industries, such as metalworking and life sciences/biomedical. This
notable and broad-based growth in robotic equipment could further increase US
manufacturing productivity, though it could come at the expense of manufacturing
jobs as more production becomes automated.
© 2015 Citigroup