What is in this article?:
- Rising U.S. Exports, Reshoring Could Help Create Up to 5 Million Jobs by 2020
- U.S. Production Offers 'Increasingly Compelling Cost Advantages'
Expect manufactured exports to surge over the next few years. Combined with jobs created as a result of reshoring, higher U.S. exports could add 2.5 million to 5 million jobs by the end of the decade, as manufacturers shift production from leading European countries and Japan to take advantage of substantially lower costs in the U.S., according to new research by the Boston Consulting Group (BCG).
BCG projects that by around 2015, the U.S. will have an export cost advantage of 5% to 25% over Germany, Italy, France, the U.K. and Japan in a range of industries. Among the biggest drivers of this advantage will be the costs of labor, natural gas and electricity. As a result, the U.S. could capture 2% to 4% of exports from the four European countries and 3% to 7% from Japan by the end of the current decade. This would translate into as much as $90 billion in additional U.S. exports per year, according to BCG’s analysis.
When the increase in U.S. exports to the rest of the world is included, annual gains could reach $130 billion. BCG forecasts that the biggest U.S. export gains will be in machinery, transportation equipment, electrical equipment and appliances, and chemicals.
“The export manufacturing sector has been the unsung hero of the U.S. economy for the past few years. But this is only the beginning,” said Harold L. Sirkin, a BCG senior partner and coauthor of the research. “The U.S. is becoming one of the lowest-cost producers of the developed world, and companies in Europe and Japan are taking notice.”
The analysis is part of BCG’s ongoing “Made in America, Again” research series on the changing global economics that are starting to favor manufacturing in the U.S. Previous reports in this series have focused on production and jobs that are likely to be brought back to the U.S. as China’s once-formidable cost advantage erodes. The new analysis raises BCG’s previous estimate of U.S. job gains. Earlier this year, BCG predicted that the U.S. would gain 2 to 3 million jobs from higher exports and production work shifting from China to the U.S.