Rising U.S. factory productivity, spurred by falling natural gas prices, could help the nation boost exports of products such as locomotives and factory machinery and add as many as 5 million manufacturing and support jobs by the decade's end, a new analysis found, according to Reuters.
High worker productivity and low energy prices driven by a surge in shale gas production will give the United States a cost advantage in exports against Western European rivals and Japan in the coming years, according to a Boston Consulting Group report set for release on Friday, Sept 21.
By 2015, those factors will make average manufacturing costs in the United States lower by 15 percent than in Germany and France, 8 percent than in the United Kingdom and 21 percent than in Japan, the study projects. Factories' costs in China will remain 7 percent cheaper than those in the United States, however.
The competitive gap in some ways reflects the open U.S. labor market, where companies can quickly add or cut workers to meet changes in demand, said Hal Sirkin, a senior partner at the BCG consultancy and author of the report.
"In Europe and Japan, it's relatively hard to lay people off, and because of that you have employees for a long period of time that you may not be able to use," Sirkin said. "In the United States, there's much more flexibility."
Besides the ease of adding or firing workers, lower wages and Americans' readiness to move for work will make U.S. factory labor costs 20 percent to 45 percent lower than prevailing costs in Western Europe and Japan by 2015, the study found.
