Manufacturing companies report that increasing pressure from low-cost imports are depressing sales and driving down margins.
In the 2016 Global Manufacturing Competitiveness Index, Deloitte & the Council on Competitiveness surveyed the landscape of global competition. Some findings:
- In 2013, manufacturing contributed $1.82 trillion to the US GDP, and $1.76 trillion to China’s. While these raw numbers are roughly equal, they represent only 12.3% of the US economy and a whopping 29.9% of China’s
- In 2014, China’s average labor productivity was $22,407.70 GDP/person. The US’s was $110,049.50 GDP/person.
- In 2015, the average global manufacturing labor cost was $16/hour. China’s was $3.28. The US’s was $37.96.
- In 2016, manufacturing CEOs tell Deloitte that the “key to unlocking future competitiveness” is through high tech offerings.
China has been using low labor costs to undercut US manufacturers on price, but the Deloitte report—and the CEOs it surveyed—predict that the future of manufacturing competitiveness lies in the production of high-quality, high-tech offerings rather than with low-cost commodity manufacturing. Domestic manufacturers will win on superior product offerings as the competitive landscape continues to shift in that direction.
As creating and marketing products to facilitate the industrial internet of things (IIoT) revolution becomes necessary for manufacturing survival, manufacturers will face major challenges in becoming known for product lines their target accounts don’t yet know about and reaching the modern customer, who demands products these manufacturers have never sold before.
Reaching these customers with targeted, relevant messages that speak not only to your product offerings but also to your customers’ specific needs will be key to staying ahead of the curve as the manufacturing industry continues to change rapidly.