United States expected to take top position from China as the most competitive manufacturing country

Press releases

United States expected to take top position from China as the most competitive manufacturing country, according to Deloitte report

Moscow, 6 April 2016 – The United States is expected to become the most competitive manufacturing nation over the next five years, with the current leader, China, slipping into second position, according to the 2016 Global Manufacturing Competitiveness Index (GMCI) report from Deloitte Touche Tohmatsu Limited’s (Deloitte Global) Global Consumer & Industrial Products Industry group and the US Council on Competitiveness (Council).

The prediction is based on an in-depth analysis of survey responses from more than 500 chief executive officers and senior leaders at manufacturing companies throughout the world. As in the 2010 and 2013 reports, the executives ranked 40 countries in terms of their current and future manufacturing competitiveness and also rated the top drivers of global manufacturing competitiveness (listed below).

“Made in the USA is making a big comeback,” said Deborah L. Wince-Smith, president and CEO of the Council on Competitiveness.  “Contrary to the view that manufacturing is declining, the study points to a manufacturing future characterized by innovation-driven growth. Manufacturing is sustainable, smart, safe, and surging – and America is expected to be among the leaders in this industry transformation.”

CEOs say that advanced manufacturing technologies are a key to unlocking future competitiveness. Predictive analytics, the network connectivity of common objects known as the “Internet of Things” (IoT), smart products and smart factories that are helping to define “Industry 4.0”, and advanced materials are viewed by executives as crucial to global manufacturing competitiveness.

“The US is currently among the top nations unlocking advanced manufacturing technologies including smart, connected products and factories, predictive analytics and advanced materials that are core to future competitiveness,” said Craig Giffi, vice chairman, Deloitte LLP and Deloitte US Automotive Sector leader. “The US continues to emphasize the connection between people, resources, policies, and organizations to form a cohesive ecosystem of innovation while investing in research and development.”

In the 2016 Global Manufacturing Competitiveness Index country rankings, regional clusters of strength emerge with North America and Asia dominating the competitive landscape. Three North American countries – US, Mexico and Canada – rank in the top 10 and are expected to remain there in the next five years. In the Asia Pacific region, five nations are expected to be in the top 10 by 2020 – China, Japan, India, Korea, and Taiwan – which only leaves two spots open for Germany and the United Kingdom to represent Europe in the top 10 by 2020.

Of the BRIC countries (Brazil, Russia, India, and China), only China is viewed by the respondents as a top 10 manufacturing country in 2016. Brazil fell from 8th in 2013 to 29th in 2016 while Russia fell from 28th in 2013 to 32nd in 2016. But, India, although currently ranked 11th, is expected to jump to the number five spot by 2020.

Another theme highlighted in the report is the rise of the Asia Pacific nations Malaysia, India, Thailand, Indonesia, and Vietnam (known by the acronym MITI V, or the “Mighty 5”). All of these countries are expected to be included in the top 15 nations by 2020 and could represent a “New China” in terms of low-cost labor, agile manufacturing capabilities, favorable demographic profiles, as well as market and economic growth.

2016 Global Manufacturing Competitiveness Index rankings by country1

Current competitiveness

 

Projected competitiveness

in five years

Rank

Country

2013 rank

1

China

1

2

United States

3

3

Germany

2

4

Japan

10

5

South Korea

5

6

United Kingdom

15

7

Taiwan

6

8

Mexico

12

9

Canada

7

10

Singapore

9

11

India

4

12

Switzerland

22

13

Sweden

21

14

Thailand

11

15

Poland

14

16

Turkey

20

17

Malaysia

13

18

Vietnam

18

19

Indonesia

17

20

Netherlands

23

21

Australia

16

22

France

25

23

Czech Republic

19

24

Finland

-

25

Spain

33

26

Belgium

27

27

South Africa

24

28

Italy

32

29

Brazil

8

30

United Arab Emirates

30

31

Ireland

37

32

Russia

28

33

Romania

29

34

Saudi Arabia

34

35

Portugal

35

36

Colombia

31

37

Egypt

36

38

Nigeria

-

39

Argentina

26

40

Greece

38

 

Rank

Country

1

United States

2

China

3

Germany

4

Japan

5

India

6

South Korea

7

Mexico

8

United Kingdom

9

Taiwan

10

Canada

11

Singapore

12

Vietnam

13

Malaysia

14

Thailand

15

Indonesia

16

Poland

17

Turkey

18

Sweden

19

Switzerland

20

Czech Republic

21

Netherlands

22

Australia

23

Brazil

24

Finland

25

South Africa

26

France

27

Spain

28

Romania

29

Belgium

30

Italy

31

Ireland

32

Russia

33

United Arab Emirates

34

Colombia

35

Portugal

36

Saudi Arabia

37

Egypt

38

Nigeria

39

Argentina

40

Greece

 

In addition to the country ranking, CEOs identified the top drivers of manufacturing competitiveness. Talent was the leading driver with focus on the quality and availability of highly skilled workers that facilitate a shift towards innovation and advanced manufacturing strategies. 73 percent of executives believe that Germany is “extremely competitive” on talent, followed by Japan at 67 percent, and the United States at 66 percent; these countries represent the top three most competitive nations on talent. Executives ranked cost competitiveness as the second most influential driver of overall competitiveness, followed by productivity, supplier networks, and legal and regulatory systems to round out the top five factors.

“In order to be globally competitive, talent has to be a top priority on the agendas of manufacturing companies," says Tim Hanley, Deloitte Global Leader for Consumer & Industrial Products Industry group. "Companies will need to be tuned into the needs of Millennials and the Generation Z workforce and use differentiated talent acquisition models and strategic retention strategies.”

Drivers of global manufacturing competitiveness

Drivers

2016 Rank

Talent

1

Cost competitiveness

2

Workforce productivity

3

Supplier network

4

Legal and regulatory system

5

Education infrastructure

6

Physical infrastructure

7

Economic, trade, financial, and tax system

8

Innovation policy and infrastructure

9

Energy policy

10

Local market attractiveness

11

Healthcare system

12

 

Visit www.deloitte.com/globalcompetitiveness to learn more about the 2016 Global Manufacturing Competitiveness Index

Source: Deloitte Touche Tohmatsu Limited and US Council on Competitiveness, 2016 Global Manufacturing Competitiveness Index 

 

 

About the 2016 Global Manufacturing Competitiveness Index

The 2016 Global Manufacturing Competitiveness Index (GMCI) report is the third study prepared by the Deloitte Touche Tohmatsu Limited (Deloitte Global) Global Consumer & Industrial Products Industry group and the US Council on Competitiveness, with prior studies published in 2010 and 2013. This multi-year research platform is designed to help global industry executives and policy makers evaluate drivers that are key to company and country level competitiveness as well as identify which nations are expected to offer the most competitive manufacturing environments through the end of this decade. The 2016 study includes more than 500 survey responses from senior manufacturing executives around the world. For more information concerning the specifics of this study and its participants, please visit www.deloitte.com/globalcompetitiveness.  

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities.  DTTL and each of its member firms are legally separate and independent entities.  DTTL (also referred to as “Deloitte Global”) does not provide services to clients.  Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries bringing world-class capabilities, insights, and high-quality service to address clients’ most complex business challenges.  To learn more about how Deloitte’s approximately 225,000 professionals make an impact that matters, please connect with us on Facebook, LinkedIn, or Twitter.

About Deloitte

Did you find this useful?