China retains its position as the most appealing manufacturing market in the world.

According to a new report from Cushman & Wakefield, China has regained first place as the most attractive manufacturing market, reaffirming its position as the sector's powerhouse. Malaysia, which was ranked first last year, is now ranked seventh, behind Lithuania. وزارة

  

The Manufacturing Risk Index report from Cushman & Wakefield ranks 42 countries based on a variety of risk and cost factors, such as political and economic risk, business conditions, and labor costs, to provide a quantitative assessment of their attractiveness.

 

Despite cost-sensitive output increasingly shifting to lower-cost countries in the Asia Pacific region, China was ranked first in the baseline index due to its efficient supply chains and infrastructure networks, which continue to provide a stable export platform. Malaysia has dropped to third place as it transitions from a low-cost to a high-value manufacturing center, but the nation remains highly attractive and has the region's largest pool of skilled workers.

 

Lithuania is the world's second-most appealing destination for manufacturers, thanks to its low European labor costs in the CEE (Central and Eastern Europe) region, which are 14 percent lower than Poland and 30 percent lower than the Czech Republic. Another reason for its popularity is that it is regarded as the second-easiest country in the CEE region to do business in.

 

The United Kingdom, which came in 31st position in the 2018 rankings, has benefited from the depreciation of the pound since the Brexit referendum, which has increased demand for UK goods abroad. In the global rankings, the United Kingdom is ahead of the Netherlands (34th), Germany (38th), and France (39th). However, the UK's attractiveness as a place to serve the rest of Europe could be jeopardized if Brexit talks fail, as a hard border with the rest of Europe would boost the cost of goods and disrupt pan-European supply chains. When only high-tech manufacturing is included in Advanced Production rankings, the UK is ranked third, behind the United States (1st) and Singapore (2nd), with Western Europe dominating the remainder of the top 10.

 

Cushman & Wakefield's Chair of Industrial & Logistics, EMEA, Robert Hall, said, "The manufacturing industry's main issues remain location and supply chains. Since overall labor costs in the region are relatively low, and infrastructure spending improves connectivity with the rest of Europe, Central and Eastern European countries remain highly attractive and globally competitive. With Brexit looming and border controls between EU member states potentially tightening, the emphasis remains on not only free movement of goods but also free movement of workers to alleviate vital labor shortages across Europe."

 

EMEA (Europe, Middle East, and Africa)

 

Five of the top ten markets are located in the area. Near proximity to Western European economies, as well as enhanced infrastructure in the form of modern highways, have boosted the appeal of Hungary (ranked 7th), Czech Republic (8th), and Slovakia in Central Europe (9th). While labor costs have risen in recent years, they remain lower than those in the west.

 

These wage increases, combined with the labor shortages, have increased the appeal of eastern locations such as Lithuania (2nd), Turkey (10th), Romania (16th), and Bulgaria (19th). Lithuania was just defeated by Estonia in terms of ease of doing business, in addition to having the lowest labor costs. The comparatively poorer infrastructure and geopolitical instability in emerging manufacturing locations such as Turkey, Romania, and Bulgaria continue to discourage manufacturers from locating their plants there. Poland was ranked 17th.

 

Cushman & Wakefield Poland's Joanna Sinkiewicz, Partner, Head of Industrial and Logistics Agency, said, "The Manufacturing Risk Index is a yearly publication that highlights the world's most appealing manufacturing locations as well as emerging trends. The report examines the market climate, risks, and costs that businesses must consider when determining where to build new manufacturing facilities. For years, Poland has been a high-ranking country in the global manufacturing risk index, but it has now dropped four positions to 17th position, compared to 2016. We should strive to reduce investor risks, as improving Poland's image would undoubtedly increase its attractiveness."

 

In 2017, France, Italy, and Spain had the highest year-on-year growth in industrial output in the Eurozone, respectively ranking 39th, 38th, and 30th. Since late 2016, these countries' manufacturing production has grown rapidly thanks to a combination of lower wages, more flexible labor laws, and a highly skilled labor force.

 

Cushman & Wakefield's EMEA Head of Logistics & Industrial Research & Insight, Lisa Graham, said, "Following recent fiscal crises and austerity measures in southern European countries, some economies are now experiencing increased industrial growth and attracting new business in a highly competitive market. Spain's automotive sector is Europe's second largest, accounting for 20% of total exports and contributing significantly to the country's manufacturing recovery. Spain currently has over a thousand specialist car manufacturers, ranking sixth globally in terms of turnover, as well as 17 vehicle manufacturing plants. Ford Motor Company's latest plant in Valencia is the company's largest in Europe, showing good support for Spain's labor reforms and manufacturing sector."

 

Asia and the Pacific

 

Three of the top four slots in the global rankings belong to China (first), Malaysia (second), and Taiwan (fourth). Taiwan has developed a reputation for producing electronic parts, with FDI in this sector hitting a six-year high in 2016, demonstrating the country's continued appeal. Machinery, biotechnology, pharmaceuticals, "green" innovation, and national defense are all supported by the government's investment strategy. Philippines (12th), Thailand (15th), Singapore (18th), and Indonesia (18th) are among the top 20 nations (20th).

 

Manufacturing is critical to the region's continued growth, with GDP per capita in Asia projected to rise by nearly 25% in the next five years, with China (currently the world's second-highest GDP) and India (currently the world's sixth-highest GDP) expected to develop at rates of up to 30%. Manufacturing will account for more than 20% of global GDP in the top 60 economies by 2020. Manufacturing will still account for a huge 30% of GDP in China in 2025.

 

The Americas are a continent that spans the globe.

 

Canada (5th) and the United States (6th) are also in the top ten. Their attractiveness as manufacturing areas is aided by a stable market climate, high-quality infrastructure, and the availability of skilled labor.

 

The latest announcements by Toyota/Mazda and Samsung to spend more in new plants in the United States are fueling reshoring hopes. Samsung recently announced its intention to invest $300 million in the construction of a new appliance manufacturing factory in South Carolina, following a similar announcement by rival LG.

 

However, President Trump's opposition to the North American Free Trade Agreement (NAFTA) has cast a pall over the potential shape of North American supply chains. While a US withdrawal is currently impossible, it would hurt Mexico and Canada as manufacturing bases.