United States expected to lead as the top manufacturing nation by 2020, according to Deloitte report

WASHINGTON, Dec. 4, 2015 /PRNewswire/ --The United States is expected to become the most competitive manufacturing nation over the next five years, with the current leader China sliding into second position, according to the upcoming 2016 Global Manufacturing Competitiveness Index 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 around the world. The country index rankings are included in a preview of findings released at the Council's annual National Competitiveness Forum held on Friday, 4 December 2015.

"The 2016 Global Manufacturing Competiveness Index shows the importance of policy, investment, and innovation for company and country level competitiveness," says Deborah L. Wince-Smith, president and CEO of the Council. "Its findings help companies shape their business strategies in order to compete successfully, and create jobs." 

The ability of the United States to take the top spot may be largely due to the country's investment in research, technology, and innovation, which enhances the competitiveness of its industries and drives economic development, according to the study Advanced Technologies Initiative: Manufacturing & Innovation, a 2015 report also published by Deloitte Global and the Council.

"Manufacturing competitiveness, increasingly propelled by advanced technologies, is converging the digital and physical worlds, within and beyond the factory to both customers and suppliers, creating a highly responsive, innovative, and competitive global manufacturing landscape," says Craig Giffi, a leader in Deloitte US Consumer & Industrial Products Industry group and co-author of the report.  

The 2016 Global Manufacturing Competitiveness Index forecasts that the top eleven countries will remain consistent between now and 2020, with some exchange of rankings. In addition to China and the United States retaining the top two spots, Germany and Japan will remain at third and fourth respectively. India, currently 11th on the list, is expected to jump up to as high as fifth place. South Korea, Canada and Singapore are expected to drop one spot each due to India's rise, while Taiwan and the UK are expected to drop two spots. Mexico, meanwhile, is expected to move up from eighth to seventh.

The next nine spots, however, show how the industry anticipates that developing markets will continue to mature and become more formidable over the next five years. Malaysia is expected to rise from 17^th to 13^th, Vietnam from 18^th to 12^th, and Indonesia from 19^th to 15^th.  Conversely, European nations including Switzerland, Sweden, Poland, and the Netherlands are expected to drop as many as six spots in their ability to compete.

"While emerging markets continue to push the leaders, the findings demonstrate the strength of the manufacturing powerhouses of the 20^th century with the United States, Germany, and Japan holding three of the top four positions currently and in the future" commented Giffi. "If you add in the UK and Canada, which are also part of the top ten most competitive manufacturing nations, it really emphasizes the 'back to the future' theme of these research findings. It also suggests that the BRIC countries (Brazil, Russia, India, and China) – with the exception of China – seem to have lost their allure as highly competitive manufacturing locations today, based on the views of executives responding to this study. India, however, is projected to move back up to the top five in the world, demonstrating executive optimism for the country in the future."

In addition to the country ranking, the report preview identified the top drivers of manufacturing competitiveness. Talent was the leading driver, with access to skilled workers widely seen by executives surveyed as the most important factor, followed closely by the cost of wages and materials. Productivity of the workforce rounded out the top three. The availability of a quality local supplier base was a distant fourth.

"Talent continues to be the most critical element of global manufacturing competitiveness," says Tim Hanley, Deloitte Global Leader for Consumer & Industrial Products Industry group. "This is consistent with the sentiments of senior executives that we have surveyed worldwide over the years. It underscores the changing nature of skills needed as manufacturers increasingly adopt advanced technologies to innovate their future products, services, and business models."

Drivers of global manufacturing competitiveness

Visit www.deloitte.com/globalcompetitiveness to learn more about the Global Manufacturing Competitiveness Index and Advanced Technology Initiative efforts. 

About the study
The 2016 Global Manufacturing Competitiveness Index is an initiative led by the US Council on Competitiveness and Deloitte Touche Tohmatsu Limited designed to determine how CEOs view the competitiveness of the manufacturing industry in different countries around the world. A global CEO survey, which generated responses from over 500 CEOs and senior executives, offers perspectives on the most important factors that drive manufacturing industry competitiveness. The global survey results also helped to create a unique Global Manufacturing Competitiveness Index ranking the relative manufacturing industry competiveness of countries and reflect how executives perceive this may change over the next five years. The in-depth study seeks to define excellence in manufacturing and draw out the implications for manufacturers in terms of the competencies required to develop and sustain an edge in a new competitive landscape. Participants were also asked to provide their views of the global economic conditions and government actions that can bolster competitiveness in the manufacturing industry. The 2016 Global Manufacturing Competitiveness Index is an updated research effort that was first conducted in 2010 and then again repeated for 2013. Prior copies of those research findings are available on both Deloitte and the Council's websites, or available upon request.

About the US Council on Competitiveness
The Council on Competitiveness is a leadership organization comprised of CEOs, university presidents and labor leaders committed to ensuring that the United States remains the world leader. The Council has one goal: to strengthen America's competitive advantage by acting as a catalyst for innovative public policy solutions. For more information, please visit www.compete.org.

About Deloitte
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. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte's more than 225,000 professionals are committed to making an impact that matters. Deloitte serves 4 out of 5 Fortune Global 500® companies.

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