As the national economy makes a comeback, domestic businesses are looking over their shoulder at foreign companies who want to take a chunk of the big U.S. market. N.C. State University economist Mike Walden comments on whether U.S. companies in a position to compete effectively.
“They really are … — at least much better than in the past. I think most people realize that we have lost many jobs in the U.S. to foreign companies, foreign manufacturers, in particular North Carolina, certainly at the top of the list in those losses.
“But it appears that things are getting brighter in terms of our competitive position. Now, for example, the U.S. is still a much lower-cost country to manufacture products than Europe and Japan, but the gap favoring the U.S. over Europe and Japan has actually widened in recent years.
“But I think the really interesting comparison — and I think the one that most people think about — is our cost compared to those China and other Asian countries. Now, granted, it is still less costly to manufacture in China, for example. But the gap between the U.S. and China in cost has narrowed. A decade ago, Chinese manufacturing costs were 18 percent lower than in the U.S. Today they are 7 percent lower. And this is because China’s labor costs and their energy costs have taken a big jump compared to the U.S.
“So, the international competitive game has really changed.”