Rising wages in China and increasing transportation costs could result in a mass return of jobs to North America, says Chris Kuehl, an economic analyst for the Fabricators & Manufacturers Association.

Kuehl referenced a Boston Consulting Group study that projects the trend could result in up to 3 million jobs returning to the United States over the next five years.

Wages in China have been rising at a rate of 15% to 20% per year, according to the Boston Consulting Group study released Oct. 7. Among the industries that would most likely shift jobs back to North America include transportation goods, electrical equipment, plastics, fabricated metal products and machinery.

Improving productivity in the United States related to new technology will also play a role in jobs returning from Asia, says Kuehl, whose organization represents the metal forming and fabrication industry.

"The revolution in manufacturing is in technology and robotics, and it has been taking place for some time," says Kuehl in a statement released Oct. 19 by the Fabricators & Manufacturers Association. "The U.S. manufacturer employs far fewer people than in the past, but the output is setting records. This has allowed the U.S. to compete globally for manufacturing business, and it has allowed many in the U.S. sector to regain some business from overseas suppliers."

Mexico on the Rise?

But the United States may not be the lowest-cost alternative for U.S. manufacturers wishing to move closer to home. Mexico has become a destination for manufacturers that want to save transportation costs but maintain their low-cost labor advantage.

Mexico can offer easier transportation and less stress than Asia as a low-cost production center, says Mark Hehl, president of manufacturing consulting firm Hehl & Associates.

View article on one page