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Top 12: Most Attractive Manufacturing Destinations 2021

Top 12: Most Attractive Manufacturing Destinations 2021

India has overtaken the United States (US) to become the second-most sought-after manufacturing destination globally, driven mainly by cost competitiveness, according to real estate consultant Cushman & Wakefield.

China remains at number one position, the consultant said in its 2021 Global Manufacturing Risk Index, which assessed the most advantageous locations for global manufacturing among 47 countries in Europe, the Americas and Asia-Pacific (APAC).

The US is at third position, followed by Canada, Czech Republic, Indonesia, Lithuania, Thailand, Malaysia and Poland.

In last year's report, the US was at second position while India ranked third.

The rankings in the report are determined based on four key parameters, including the country's capability to restart manufacturing, business environment (availability of talent/labour, access to markets), operating costs, and the risks (political, economic and environmental).

The baseline ranking for top manufacturing destinations is determined on the basis of a country's operating conditions and cost effectiveness. China has retained its top position and continues to diversify its manufacturing base. The report stated that even with the Biden administration’s concerns about trade, China continues to diversify its base to move up the value chain to focus on telecom, high-tech, and computers. Guangdong and Jiangsu regions are spearheading its electronic components and automotive manufacturing, while  Zhejiang and Liaoning focus on chemicals and natural resources.

The US is a desirable hub as it offers a large consumer market as well as incentives at both state and federal levels. But its rapid adoption of technology and policies could make it a tough competitor to China, stated the report.

Keterangan Gambar (© Pemilik Gambar)

When it came to the cost scenario, India and Vietnam were overtaken by Indonesia, while China retained its lead position. India slipped to the third rank, while Indonesia moved to the second from the fifth spot.

The report stated that Jakarta’s dipping rents have a part to play in cost effectiveness that pushed Indonesia up by three spots. While wage costs in Vietnam are cheaper than in China, it is facing increasing competition from lower cost locations. Similarly, Thailand’s cost profile moved it to the fifth spot from eighth. Colombia that has labour costs similar to Asia’s climbed from 15th spot to the eighth spot.

But when it comes to the risk scenario that takes into account lower levels of economic and political risks, India is nowhere near the top. India has been clubbed in the third quartile of the rankings along with Malaysia, Belgium, Indonesia, Bulgaria, Romania, Thailand, Hungary, Colombia, Italy, Peru and Vietnam. On top of the first quartile is China, followed by Canada, US, Finland, Czech Republic. The second quartile has countries like Lithuania, France, Netherlands, Spain, Poland, Japan, UK etc.

Likewise, when it comes to the bounce back rating that takes into account a country’s ability to restart its manufacturing sector, India is in the fourth quartile with Sri Lanka, Mexico, Vietnam, Indonesia, Bulgaria, Thailand, Tunisia, Peru, Philippines and Venezuela.



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