The American Made Advantage

Since the end of the financial crisis, the U.S. manufacturing industry has added more than 500,000 jobs. Currently, the U.S. manufacturing industry has 12 million workers. employment of manufacturing workers.

The largest share of these new manufacturing jobs is in the automotive industry. According to data released by the US Department of Labor, since the end of the financial crisis, the US auto manufacturing sector has created a total of 125,000 jobs, accounting for a quarter of all new manufacturing jobs.

Cost reductions fuel the rise of US manufacturing

renew manufacturing jobs An important reason for the possibility of returning to the United States is the overall decline in the cost of manufacturing in the United States. A recent report from the Boston Consulting Group said that the United States is accelerating to become one of the lowest manufacturing costs in the developed world. Boston Consulting Research shows that by 2015, the average cost of manufacturing in the United States will be about 8-18% lower than that of developed countries such as Germany, Japan, France, Italy and the United Kingdom.

The decline in the average cost of manufacturing in the United States is mainly due to the reduction of labor costs, natural gas and electricity costs. Among them, the shale gas technology revolution in the United States has changed the global energy supply pattern to a certain extent.

Some well-known manufacturing companies, such as Toyota, Airbus, Yamaha, Siemens, Rolls-Royce, etc. are considering or have already moved more and more production lines to the United States. "It's hard to gauge the extent to which the return of manufacturing will affect the U.S. economy," said Chris Williamson, chief economist at Markit, a professional information services firm. As the advantages of countries with low manufacturing costs are gradually weakening, many companies are moving their manufacturing plants from these countries to the United States."

Nevertheless, in terms of low-end manufacturing such as clothing, shoes and hats, less developed countries and regions in Southeast Asia are compared to the United States. Still occupy a clear cost advantage, such as the Brooks Brothers brand of American-made cashmere sweaters are priced as high as $ 1,395 each, and the same style imported is only $ 1,098. A&F's American-made sweaters cost $150 each, but many of its heavily discounted sweaters are made overseas for half or less.

"Made in America" is favored by consumers

But to the delight of American manufacturers, American consumers appear to be becoming less price sensitive in the apparel category. According to the American Apparel and Footwear Association, Americans spend $340 billion a year on clothing and shoes, more than twice as much on new cars. The survey shows that Americans are becoming more willing to buy goods made in the United States, which means that the consumer price elasticity curve of American consumers for clothing products is flattening.

A survey shows that two-thirds of Americans pay attention to the labels on clothing items to determine if they are made in the United States. For a garment that costs $50 overseas, nearly half of the respondents said they would pay $5-20 more for the same garment made in the United States.

This "irrational" consumption behavior of American consumers may only be explained to some extent by a certain "patriotic complex", "I once wanted to put a Put on an American flag," said Frank Blake, chief executive of The Home Depot.

Government boosts manufacturing competitiveness

The revival of American manufacturing is actually inseparable from the efforts of the Obama administration. Specifically, Obama's plan to revive the manufacturing industry includes the following aspects:

First, the government invests 1 billion US dollars to build 15 manufacturing innovation institutes across the United States. These institutes will integrate enterprises, research institutions, community colleges and Governments come together to jointly invest in manufacturing that can be turned into capacity.

The second is to reduce the corporate tax on manufacturing companies to 25%, and further expand the incentives for long-term research and development projects.

The third is to establish a partnership program with the community, especially in the areas where the manufacturing industry was the most damaged during the financial crisis, to attract manufacturers and supply chains to come to do business.

Fourth is the export doubling plan. The United States has signed trade agreements with South Korea, Colombia, Panama and the European Union to boost exports made in the United States.

If these measures are really implemented, it will undoubtedly improve the efficiency of American manufacturing workers and make American manufacturing, especially high-tech high-end manufacturing, more competitive. Whether it is manufacturing or consumption data, after entering 2012, the US economy began to show obvious signs of recovery and stabilization. At the same time, the real estate market has begun to heat up. Housing prices in major US cities have now approached or even returned to pre-crisis levels, GDP growth has continued to be positive, and the unemployment rate has dropped from a high of 10% at the end of 2009 to the current level of around 7%. At the same time, inflation remains in the ideal range below 2%.

This article is excerpted from Tencent Finance