(Photo : Quality Wars) This photo shows workers inside a Chinese factory.


A study conducted by the Boston Consulting Group found that US-based manufacturers have become more competitive in the last ten years. China, Brazil, and other manufacturers are slowly losing their advantages over the US.



According to the study, China's traction over the US has been affected by the increasing labor and energy costs. Additionally, the explosion of shale gas production in the US has reduced the cost of natural gas and electricity.



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This Friday, the Boston Consulting Group will be releasing a report on its study about manufacturing costs. Out of the 25 countries included in the study, only seven had lesser manufacturing costs compared to the US this year. Since 2004, American manufacturers have already overtaken major exporters except for Mexico, India, and the Netherlands.



In 2004, China's manufacturing cost was 14% lesser compared to that of the US. At present, the difference has dropped to 5%. Should this pattern continue, US manufacturing will become cheaper compared to China's by 2018.



In the last decade, China's factory labor costs went up by 187% compared to 27% in the US. And because the Chinese currency also went up 30% in the same period, the price of exported goods also went up. In contrast, the price of foreign goods dropped in China.



In terms of electricity costs, China's increased by 66%, with the US' only by 30%. When large -scale shale gas production began in the US in 2005, electric bills in the US, Canada, as well as Mexico have decreased. Although China also has its own shale gas reserves, these are still undeveloped.



Nations with lower manufacturing costs than in the US include Indonesia, India, Thailand, China, Russia, Taiwan, and Mexico. Among the countries surveyed, Australia had the highest manufacturing costs. US manufacturing was 30% lower than in Australia, according to Boston Consulting Group.

