Made in America Making a Comeback

“Made in America”: The Comeback

By  | Daily Ticker – Thu, May 12, 2011 8:53 AM EDT

U.S. exports hit a record $173 billion in March, up 15% from a year-ago and 37% from 2009. The good times for “Made in America” are just getting started, according to a new study from The Boston Consulting Group (BCG).

In fact, BCG predicts 2015 will be a tipping point of sorts, when global manufacturers will view the U.S. as equal to if not better-than China, senior partner Harold Sirkin tells me in the accompanying video.

“We’re not saying the world’s going to suddenly change and U.S. companies are going to manufacture here for shipment to China,” Sirkin says. “But the U.S. will be a very important place if you’re going to sell into the U.S.”

In making this seemingly outrageous forecast, Sirkin cites the following:

  • Rising wages in China plus the strengthening yuan are eroding China’s cost advantage vs. the U.S.
  • America’s “very productive, motivated and flexible workforce” is attractive to employers and all aspects of U.S. society — including unions and state governments — are “focused on creating jobs.”
  • Intangibles such as the length of the supply chain and the challenges of communicating over multiple time zones work to the advantage of the U.S. (The same is true of Mexico, which BCG says is “also poised to benefit as a low-cost alternative” to China.)

For the record, BCG’s forecast is based on the U.S. regulatory and tax environment remaining the same. This is about “pure economics,” Sirkin says. “If you improve tax rates and regulation, it’ll only make the trend happen faster.”

Clearly this forecast runs against conventional wisdom. But conventional wisdom also holds that America “doesn’t make anything anymore,” which isn’t true either. Since 1972, U.S. manufacturing output has risen nearly 2.5 times, according to BCG.

But U.S. manufacturing employment has fallen nearly 25% in the same time period and few consumer goods are made here anymore, which is why it “feels” worse than the reality; if BCG is even half right, that’s going to change for the better soon.

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him ataltask@yahoo.com

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