by Brianna Crandall — September 25, 2015—Malaysia has retained pole position in global real estate adviser Cushman & Wakefield’s 2015 Where in the World? Manufacturing Index. Part of a series, this third annual global report ranks locations worldwide by assessing costs, risks and operating conditions across different sectors.
The global report addresses the “Winds of Change” in the manufacturing sector, assessing how political, economic, technological and environmental risks are managed when companies are assessing their manufacturing portfolios and deciding where to locate new facilities.
The report provides a barometer for manufacturers to assess their real estate strategies against an index, ranking the top 30 global manufacturing locations defined by output and the top 15 locations witnessing the most prominent growth.
The results reveal how the Asia-Pacific (APAC) region is benefitting from a lower cost business environment that is proving attractive to manufacturers. The “APAC powerhouse” is continuing its dominance, this year securing seven places out of the top 10 within the main index.
This year’s main index results by manufacturing output are:
- Malaysia (APAC)
- Taiwan, Republic of China (APAC)
- China (APAC)
- United States (Americas)
- Republic of Korea (APAC)
- Canada (Americas)
- Singapore (APAC)
- Turkey (EMEA)
- Thailand (APAC)
- Indonesia (APAC)
Richard Middleton, head of occupier services in Europe/Middle East/Africa (EMEA) and Asia Pacific, commented, “The markets of Asia Pacific continue to remain particularly attractive to manufacturers, and this shows in our latest index rankings. Malaysia has retained top place in our main index for the second year running, and Vietnam tops our growth index and is maturing as a manufacturing destination.
The Manufacturing Index ranks countries by manufacturing output and growth.(Click on image to enlarge)
“From a broader perspective, there remains some volatility at play. While China remains the world leader in terms of manufacturing output and benefits from the scale of its immediate marketplace, rising labor costs have caused a shift in strategy for some manufacturers.
“This has not only benefitted the APAC regions of Malaysia and Vietnam, but has also added to a re-shoring trend, with a number of manufacturers moving their plant and facilities back to Western markets. This has strengthened the prospects of certain European locations, notably Turkey, which has positioned itself at the crossroads of Europe, Asia, Russia and Africa.”
Following a less successful period for U.S. manufacturing, many assumed that its market was in a state of irreversible decline. However, a re-shoring trend among manufacturers and a stronger energy platform has resulted in the United States ranking in 4th position, up five places since 2014.
Mark Wanic, Cushman & Wakefield’s head of occupier services in the Americas, commented, “There is a genuine sense that manufacturing is now making a comeback in the U.S. as global demand appears to have turned a corner. The cost differential to cheaper markets, which contributed to a number of manufacturers moving ‘off-shore,’ has now narrowed — with the U.S. regaining a competitive edge.
“A more competitive energy platform, both in terms of cost and security, is adding to the U.S. as a manufacturing location. In addition, supply-chain management is also collectively adding to the more positive outlook evident from our latest index ranking.”
As consumer tastes develop for more customized products, manufacturers face an ever-pressing need to respond quickly to new trends and ensure products are delivered expediently to their customers. Increasingly, location selection is all about being able to better serve and reach customers as quickly as possible, says Cushman & Wakefield, but it is critical to weigh up individual market conditions, risks and costs as part of any relocation or expansion strategy.
Where in the World? Manufacturing Index 2015 is available from the Cushman & Wakefield Web site.
