Share:

Cushman & Wakefield’s Annual Manufacturing Risk Index Analyzes COVID-19’s Impact

6/25/2020

Manufacturing Sector Reshoring, Diversifying and Holding Inventory Amid Pandemic

CHICAGO, June 25, 2020 – As the manufacturing sector begins to reopen around the world, new trends are emerging in response to the global COVID-19 pandemic, according to new research by Cushman & Wakefield (NYSE: CWK).

Cushman & Wakefield analyzed the impact of COVID-19 on the global manufacturing sector and how countries around the world are currently positioned and projected to rebound. As manufacturers seek to safeguard production lines while plotting a path to profitability, Cushman & Wakefield’s 2020 Global Manufacturing Risk Index assesses the most suitable locations for global manufacturing among 48 countries in Europe, the Americas and Asia.

Within the report, countries have been ranked by their projected ability to restart their manufacturing sectors once confinement measures are relaxed and business starts to return to normal. This “bounce-back-ability” ranking is based on six key variables and is weighted according to its estimated contribution to manufacturing sector recovery.

China retains top position on the baseline scenario ranking, followed by the United States in second.

“Both China and the U.S. offer a large consumer market, ample labor supply and incentives at both the federal and state level, as well as an established infrastructure network,” said Jason Tolliver, global head of newCommerce research at Cushman & Wakefield. “With the rapid adoption of technology into production processes, the U.S. and its higher-cost workforce could start to be better aligned to compete with China for manufacturing jobs.”

Baseline Rankings

Country

2019

2020

China

1

1

United States

2

2

India

4

3

Czech Republic

6

4

Canada

5

5

 

“We’re seeing a severe disruption in economic activity across the board and the data we’ve been able to accumulate has shown the benefits and pitfalls of our global interconnectivity,” said Lisa Graham, EMEA Head of Industrial Research at Cushman & Wakefield. “However feasible and desirable, reshoring on a mass scale is not realistic and will not happen in the immediate term. Instead, to build resilience in the event of a second pandemic wave or second lockdown period, manufacturers are more likely to address the two most pressing vulnerabilities: materials and component sourcing and supply chain disruptions.”

The report also examined political and economic risk factors, showing Canada topping the list in 2020, up one spot from 2019 and pushing the United States into the second spot. Singapore jumped from sixth place to third, Germany moved from seventh to fourth and China rounded out the top five.

Risk Ranking

Country

2019

2020

Canada

2

1

United States

1

2

Singapore

6

3

Germany

7

4

China

5

5


The third category studied was overall cost ranking, including labor and operating costs. In this category, this year’s MRI cost scenario rankings reflect the broad impact of the US-China trade dispute on regional positioning. While China retains its lead position, Vietnam and India jumped to second and third positions respectively.

“The manufacturing shift towards Southeast Asia has been a long time in the making. As minimum wages in China grew, more orders for labor intensive products, such as clothes, toys and shoes, shifted to less expensive locations,” said Tolliver. “However, despite government initiative to attract manufacturers by Southeast Asian countries, China retains a clear infrastructure advantage with the ability to efficiently move goods via road, rail or sea transport.”

Cost Ranking

Country

2019

2020

China

1

1

Vietnam

4

2

India

6

3

Malaysia

3

4

Indonesia

5

5


“The current pandemic leaves many unanswered questions as to what is in store for the global manufacturing sector,” said Tolliver. “We’re optimistic about its future, but it will ultimately depend on the industry’s components that are currently flourishing, as well as those countries and manufacturers that are still operable during the current onset of new challenges.”

Download the 2020 Global Manufacturing Risk Index.


About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter

Media Contact

Michael Boonshoft New York Communications
Michael Boonshoft

Communications Director • New York

RELATED INSIGHTS

APAC Fit-out ost Guide
Article • Insights

Get The Most From Your Asia Pacific Office Fit-out

In our Asia Pacific Office Fit-out Cost Guide 2019-2020, corporate occupiers can get the latest data on fit-out costs across 28 key gateway cities in the region. Whether it’s a low, medium or high-quality specification fit-out requirement, the guide serves to assist occupiers in defining their capital planning and relocation budgets. Here’s a sneak peek at some of the headlines.

9/25/2020
North American Mid-Year Ports Update Card Image
Research • Industrial

North American Mid-Year Ports Report

The first half of 2020 saw unprecedented swings in the U.S. and global economies, with trade and port activity being directly affected. The good news, as of this writing, is that many U.S. states and countries around the world are cautiously reopening.
Carolyn Salzer • 9/24/2020
sublease activity (image)
Research • Workplace

Measuring Sublease Activity Throughout the Pandemic - Vol. 2

It should come as no surprise that sublease vacancy increased generally across the office market and minimally throughout the industrial market in the first half of 2020. For market-by-market details, explore our interactive map.
Robert Sammons • 9/24/2020

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.