Economic Development News
|EXODUS OF JOBS TO CHINA IS REVERSING, PUBLISHER TELLS MARTIN COUNTY BDB|
|Published Wednesday, March 28, 2012 7:00 pm|
STUART — Rising labor and manufacturing costs in China and the recession domestically are combining to reverse the wave of U.S. manufacturers taking jobs to China.
Instead, U.S. and foreign-owned manufacturing companies are relocating to the U.S. South and Mexico, the publisher of an Alabama-based business magazine told about 45 businesspeople at the Business Development Board of Martin County offices Wednesday evening.
Mike Randle, owner and publisher of Southern Business and Development, said he discovered in August that a study of new business projects in the South that yielded at least 200 jobs showed that projects by service-oriented businesses eclipsed manufacturing projects for the first time in 1997.
That trend lasted 11 years, but manufacturing has regained the upper hand since 2008.
Randle said manufacturers base their decisions primarily on cost.
"One of the reasons we're so attractive now is the recession," Randle said.
Randle referred to an analysis last year by the Boston Consulting Group that found, "Within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world."
Wages in China that were 58 cents an hour a decade or so ago have increased tenfold, while wages for U.S. workers have risen only 4 percent in the same period.
Auto manufacturers that have established plants in the South have received most of the headlines, but other industry sectors are following suit, including appliances, furniture and textiles.
Most of those industries are not on Martin County's list of targeted industries, but the county could try to attract smaller businesses that supply those manufacturers, said Crystal Stiles, co-director of the Business Development Board.
Stiles cited as an example Caterpillar Inc., the world's largest construction and mining equipment manufacturer, which announced last month that it will build a $200 million manufacturing facility in Athens, Ga.
"Caterpillar isn't on the target list, but maybe a supplier to them is," Stiles said.
Janie Vallery, president and co-owner of Armstrong Nautical Products in Stuart, said that in the 22 years since she and her partner, Rusty Sedlack, bought the company they have seen more and more of their competitors relocate to China.
"I could see a lot of what is happening around us in what (Randle) is saying," Vallery said.
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