Wednesday, January 27, 2010

Are the days of outsourcing manufacturing jobs starting to end?

We found this article regarding manufacturing jobs in America and felt it was worth sharing - particularly because it may be a sign of reversing manufacturing trends that have hammered America for decades.

Here's the crux of the article: The costs and issues of doing manufacturing business in countries like China are rising.  Specific costs include items like tarrifs, rising suppply chain costs, intellectual property theft, transportation and labor.  According to an index developed for this purposes, manufacturing in China now only really has a 5% advantage over manufacturing in America.  As a result, American companies are starting to rethink whether or not such outsourcing is even worth it.

One of the key variables here, in your resident blogger's opinion, is oil.  Compared to where it was before the recession (over $100 a barrel), oil really isn't that high right now.  What happens when oil shoots through the roof again?  And what happens if the United States can get its transportation infrastructure in better shape, as well as better develop alternative routes of transportation, like rail?

This chould, potentially, be a very big deal.

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