In Manufacturing, the U.S. Is Surprisingly Competitive

Forget what you think you know about high-cost and low-cost countries for manufacturing because there’s been a dramatic shakeup over the past decade. According to a report by Boston Consulting Group, the U.S. has shot up the ranks of competitiveness, while Brazil has foundered badly.

The report ranks the world’s 25 biggest exporters of manufactured goods in terms of direct costs of production—factoring in wages, productivity, and electricity and natural gas. Indonesia and India are the cheapest and next-cheapest in terms of those direct costs. But they have other problems such as poor infrastructure, says Justin Rose, a co-author of the report and partner at BCG. Brazil’s costs have gotten as high as those of Western Europe. Mexico, on the other hand, has made big productivity gains.