All those stories about manufacturing coming back to the US from China ? Don’t believe it

I had someone run a new project by me the other day. This is a kids product and they had made some inquiries with US manufacturers before coming to me. In their email they wrote: “The truth of the matter is that we just can’t get some of these materials in the U.S. The companies I’ve contacted here either don’t have the production capacity for what I consider a small first run (5,000 sets),or prices are sky high even with a bulk order?! Or they’re totally unwilling to white label or co-brand with a startup.”

So all the stories you read nowadays about manufacturing coming back to the US from China, well obviously you have to take those stories with a grain of salt. The US is still a very expensive place to make any kind of consumer product. Just out of curiosity I looked up to see what the average manufacturing wage is between China and the US. The US Govt Bureau of Labor Statistics (BLS) keeps theses figures and is as good a source as any for this information. So that is where I went. According to the BLS, in 2012 the average hourly wage for a worker in the manufacturing industry in the US was $ 35,67. In Japan it was $ 35.34. Just to give you an idea of how expensive labor is in industrialized countries. But in fact, in some European countries e.g. Norway, Switzerland, the average hourly manufacturing wage approaches $ 70.00 per hour.

Probably because of doubts about validity of data and methodology China was not included in the primary BLS table of 33 countries. But there was a separate table for China in which the BLS estimates that China’s average manufacturing wage in 2012 was $ 1.74. Compare that to Taiwan where the average hourly wage in manufacturing in 2012 was $9,46 or in the Philippines where it was $ 2.10 per hour. In other words, China is still the cheapest place to manufacture. And by a lot.

Moral of the story, if you are making any kind of consumer product in any sizeable QTYs, you can certainly to look into doing some aspect of it domestically, maybe packaging, but your best bet for the bulk of your production is still China. And for many years to come.

mr huang

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s