Call it a “Tale of Two Studies.” The first fires up the imagination over the potential for furniture manufacturing to return to U.S. soil in a big way, while the second throws cold water on that very notion.
On the sunny side, the new study by The Boston Consulting Group (BCG), “Made in America, Again: Why Manufacturing Will Return to the U.S.,” identifies furniture as one of seven manufacturing industries poised to make a serious comeback over the next five years. The main driving force? According to the researchers, Chinese wages rising at 15 to 20 percent per year combined with the escalating appreciation of the yuan vs. the dollar will shrink “the once-enormous labor-cost gap between Chinese coastal provinces and certain lower-cost U.S. states” to less than 40 percent by around 2015.
“A surprising amount of work that rushed to China over the past decade could soon start to come back and the economic impact could be significant,” said Harold Sirkin, a BCG senior partner and lead author of the analysis. “We’re on record predicting a U.S. manufacturing renaissance starting by around 2015.”
In addition to furniture, BCG’s study predicts the return of domestic manufacturing for transportation vehicles and parts; electrical equipment, including household appliances; plastics and rubber products; machinery; fabricated metal products; and computers/electronics. The BCG study places the added total annual output of these seven sectors at $100 billion. This manufacturing resurgence would also translate into the creation of 2 million to 3 million new jobs, BCG says.