Fortune:US Manufacturing costs almost as low as China-credits Fracking (1 Viewer)

[Rove!]

http://fortune.com/2015/06/26/fracking-manufacturing-costs/

BCG, the Boston consultancy, estimates the average cost to manufacture goods in the U.S. is now only 5% higher than in China and is actually 10% to 20% lower than in major European economies. Even more striking: BCG projects that by 2018 it will be 2% to 3% cheaper to make stuff here than in China. Part of the reason for the narrowing gap is that wages have been rising in China. And American companies have been boosting their productivity faster than many of their international competitors. But perhaps the single largest factor is that fracking has helped dramatically drive down the price of oil and gas that’s being used in energy intensive industries such as steel, aluminum, paper and petrochemicals. BCG calculates that U.S. industrial electricity prices are now 30% to 50% lower than those of other major exporters.

 

[sublimeone]

Another unexpected benefit of energy independence.

 

[Chadstroma]

Interesting.

Manufacturing has been shifting back to the US for some time now. This will serve to speed that up.

It will be interesting to see how China will be able to manage the loss of manufacturing. Can it shift to a full modern economy rather than being the worlds cheap manufacturing hub? If the economy stumbles significantly, can the regime stay in power with unhappy masses use to economic opportunity then lost?

 

[Chadstroma]

Another unexpected benefit of energy independence.

I don't know if that is unexpected so much.

I have pushed for energy independence in my conversations and incorporating the use of renewables but also backing fracking and drilling because of the dramatic economic impact it will have on our economy. I have long said that even if we switched every vehicle to some renewable energy (pick your favorite) we would still need oil because how much oil is involved in pretty much everything in modern life. The lower the cost of that oil the more capital there is to spend elsewhere and the more activity you have. Plus, as this thread points out, the more it makes the US attractive for manufacturing.

 

[sbonomo]

Hmmm...wait and see I guess. China is due for a huge correction sooner rather than later. I am interested to see what that does both shirt and long term to our economy.

 

[Rove!]

Most people have favored energy independence since the 70s. It's the how and when where there is disagreement.

 

[Chadstroma]

Hmmm...wait and see I guess. China is due for a huge correction sooner rather than later. I am interested to see what that does both shirt and long term to our economy.

Aren't they in the process of one right now?

 

[Chadstroma]

Most people have favored energy independence since the 70s. It's the how and when where there is disagreement.

Yea, I think I am in the minority where I have basically favored everything.

 

[Mad Cow]

Hmm, and here I thought it was because Americans were getting a little more sumpin' sumpin'. Misleading title.