Industrial Insight

we’re back…. | January 13, 2012

CARPE DIEM

Professor Mark J. Perry’s Blog for Economics and Finance

Monday, January 09, 2012

Welcome to the U.S. Manufacturing Renaissance

The labor comparative gap that China has had has disappeared because the total costs of production for certain products have moved towards US costs. This is particular where labor costs are a smaller proportion of the total costs. Although readers may be feel that it is an exaggeration to claim that ‘off-shoring’ will immediately be reversed back to ‘on-shoring’, perhaps it is better to suggest that the ‘hollowing out’ of US manufacturing has reached its nadir. The worst of the transition is behind the US all other factors of production being equal. The important driver will be speed of productivity gains between the two countries that encourages CEOs to open and close plants in one or the other, not just the labour cost.


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About author

Raymond Monroe is the Executive Vice President for the steel industry trade Association, Steel Founders’ Society of America. He enjoys his crazy family including his wife, five children and their spouses, and many fun and lively grandchildren. Raymond brings more than 40 years in the industry here to share his ‘Industrial Insight’ and other current topics affecting the economic picture of our world today.

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